In terms of atmosphere, it reminds me a great deal of Dario Argento's 'Suspiria' and 'Inferno', that sort of dreamlike horror where reality and a strange fantasy world seem to be blending together. Add a touch of A Nightmare on Elm Street (only a touch, mind you) and you have a recipe for 90 minutes which are in turn entertaining, confusing and deeply atmospheric.
A young lady is about to be married to a military hero, but in the run-up to her wedding she begins to have nightmares about a pair of demons, played by Timothy Spall and Jimmy Nail.
The young woman, Diana (played by Jemma Redgrave) finds a kindred spirit in visiting American girl Jenny (an intriguing Kathleen Wilhoite), who is in the country searching for her forgotten past, but even she seems to be caught up in the dreams too...
Timothy Spall gets all of the best moments of the movie, especially when his appearance begins to change in every shot. His performance is sinister and restrained, which makes the character that bit more frightening. Some may claim it is nothing more than a retread of A Nightmare on Elm Street, but it's a far more refined and dreamlike film that Craven's masterpiece.
Dream Demon may not be particularly elaborate or gory, but what it lacks in scale and splatter is makes up for with bags of tension, otherworldly unease and nightmarish moments of psychic bait-and-switch. Is it a dream? Is it real? I don't really care, to be honest. It's just a very watchable horror movie with more brains than guts, and that's fine by me.