¡No pasa nada!
I've heard the above phrase ¡No pasa nada! A lot in Spain.
This obviously comes from the verb pasar. But is this not imperative, informal, negative therefore requiring the subjunctive?
¡No pases nada! ?
Like Jack-Obrien said, I have mostly heard it in the comforting sort of context.
The way I hear it is like the American "Don´t worry about it." kind of thing.
Example, you spill on the floor and apologize profusely. It´s not a big deal, so your friend says "No pasa nada!"
Or it can also mean "it´s okay", like the nightmare example Jack-Obrien gave. Like "hush hush, it´s okay" to calm a child from crying after a nightmare or bumping their head, etc.
And regarding the tense conjugation, it is present indicative, 3rd person singular. Literally "nothing is happening." Trying to literally translate it won´t make much sense in most contexts, you just have to know the phrasing and what it means!
There are so many situations where you could hear "no pasa nada". Everything from a mother comforting her little girl that just awoke from a nightmare with "no pasa nada" to a friend responding to another in response to ¿Qué pasa?
"No pasa nada" is a general response to "¿Qué pasa?". In English this would be a friend asking you "What's up" or "What's happening".
It is also commonly used when you excuse yourself for offending somebody. For example, I'm sorry I was late for you party. No pasa nada .(Don't worry about it. It's not important.)