ELM

Dr.Charles goes to his superior, Dr.Hastings, to request special permission to start the Dream Studies Class. She reluctantly agrees to his proposal. As the scene pans out a book with the Order of Thorn on her bookshelf. Sam talks to Rochelle on her way to class before Rochelle leaves with Misha in his red convertible. The students all show up to DSC (Dream Studies Class) rowdy.

Dr.C (Dr.Charles' nickname) tells them the nature of the DSC and takes them to the room on campus in order to start his experiments. He starts the experiments with four of the students on how to control what they dream about, then he proceeds to test the others. After they all go out for dinner. At night Sam dreams of fire and a house, then she sees grotesque demon-like creatures chasing her before she wakes up.

The next day at school the other students talk about having similar nightmares. In class, Dr.C informs that may have been a simple side effect of the DSC. Dr.C goes on to say that if they want to drop out of the class if they want to. None of the students except the offer. This tie he teaches them to control their nightmares. He teaches them how to conquer their fears by dreaming of their fears as nightmares. There is a montage of their sessions.

Their training goes well as Dr.C informs Dr.Hasings that he is worried that his students are being haunted by something in their dreams. Dr.Hastings assures him that she has lined up investors for him that have taken interest which puts him at ease. Dr.C changes the venue for the experiments to his home on Elm Street. After they arrive he takes them to his basement to show them his equipment for the home DSC for shared dreams. The students share a dream which turns into a shared nightmare.

Later that night one of the students die. After the others are informed and one of them nearly dies in a daydream they elect to go to Dr.C's house. Once they arrive he is frantic and tells them that this might be the work of dream demons and that such a thing is preposterous. The students are skeptical of his words, just as he is, and they decide to test it. Dr.C goes into the dreams with them this time.

The dream demons take control of their dreams. Many of the students die as they attempt to fight the demons in the dream-world. After they awaken they try to run out of the house. the demons use their powers to affect the awakened-world. Dr.C sets his house on fire while the remaining students try to escape. 

They manage to make it out while Dr.C faces off against the demons. The students use their newfound abilities to daydream as Dr.C sacrifices himself to bind the dream demons so that the students can send them back to the dream-world. The demons offer him a deal to continue his work as their slave.

End credits as Dr.Hastings call her superiors and tell them that the experiments were successful.