Nightmares and Dreams are actual creatures who invade human minds as embodied fears and joys. But with the new BlissMax pill (guaranteed to give you good dreams all night!) the Nightmares are starving.
Violet doesn't use BlissMax (or any modern niceties, thanks Dad), and one night, a Nightmare—the fear of hell—enters her enticingly un-medicated mind and gets trapped. Though Violet has a penchant for creepy things, having a Nightmare stuck inside her mind causes problems: narcolepsy and yet further distance from reality, to name a few, not to mention the Nightmare begins to starve in the wake of fresh human fear.
In a misguided attempt to get him home, she gets dragged into the city of Nightmares, Halloweentown on steroids. Once there, it becomes apparent the Dreams and Nightmares hate each other and getting back (alive) only tips the list of growing complications.