The episode opens with the dream sequences of Voyager senior staff. The two commonalities between the dreams are that they are all nightmares and that in each dream, an unknown alien appears towards the end of each dream. Upon waking, and reporting to their duty shifts on the bridge, the captain and first officer compare dreams, and when noting the common strange alien in their dreams, Tom Paris notes that the same alien appeared in his dream. At this point it is realized that Harry Kim has not reported for duty yet. After failing to respond to the bridge hails, Janeway takes Tuvok to Kim's quarters in an attempt to find out why he isn't responding to hails. Upon entering Kim's quarters, they find him asleep and are unable to wake him up. They take him to sickbay for further examination. The Doctor explains that Kim and several other crew members are in a hyper-REM state and that he cannot wake them, even through medical means. The Doctor advises that everyone avoid going to sleep for the time being.

It is realized that Voyager is experiencing contact with an alien race which lives out its life in a dream state. Chakotay mentions that he has mastered a skill of his native people called "lucid dreaming." Before entering a dream state, Chakotay provides himself with a trigger image, Earth's Moon that will remind him that he is still dreaming and can use it to restore himself to a conscious state. Suddenly he is asleep and in his dream, he is holding a spear and is deer hunting through the corridors of Voyager. When the deer enters the mess hall, he sees the full moon outside the window and realizes he's dreaming. A few seconds later, he sees the deer again but it transforms into the alien. The two men fight but Chakotay manages to subdue the alien who expresses surprise that Chakotay can control his dream. Chakotay then forces the alien to tell him how the other crew members can wake up. The alien tells him that once they passed their space, they will awake. Chakotay taps his hand three times and is instantly awake in sickbay.

Upon reaching their desired destination however, it is realized that Voyager was deceived and was actually directed to the heart of the "Dream Aliens" space. First, a few crewmen cannot awaken, then the aliens attack. The attack occurs in the guise of crew members being put into a sleep state. The aliens take over the ship, or so it seems. The remainder of the crew are now not only in a state of sleep, but they all share the same dream.

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