Four billion years ago, when the world began to form, there were no dreams, and there was no reality. It was not until the creation of consciousness that these two realms divided. Mankind's need for order caused the world of "reality" to solidify. However, men also had a subconscious need to periodically enter the "dreamworld." Thus, the barrier between the two worlds remains fluid, allowing humans to exist in the real world by day, but enter the dreamworld in slumber. While this ability is universal, most people are trapped within the barriers of their own mind. There are a few, however, who are able to pass from one person's dream to another's. These few are known as “dreamhoppers.”
REN MATSUO is a college student at an International School in Japan who has been having a recurring dream about a beautiful American red-headed girl. She seems to be just watching him at first, but later beckons him to come to America. He is needed there. She nervously disappears, however, before she can explain why. He is somewhat haunted by these dreams, but inevitably dismisses them as the work of an overactive imagination. That is, until he receives a phone call from a hospital in New York telling him that his grandfather has been hospitalized. Ren hops the first available flight to New York.
Arriving in New York is like arriving on another planet. Ren is simultaneously disoriented and excited by the fast-paced and colorful city, a bewildering contrast from his quiet home in Okayama. His mood turns somber, however, when he sees his grandfather, HARU, lying comatose in his hospital bed. The doctor gives Ren a very cold and clinical rundown of Haru’s condition, explaining that he may never wake up. Ren is devastated, but is given encouragement by Haru’s kindly nurse, EVELYN, who suggests that Haru may improve with the presence of his beloved grandson. Ren, who was always close to Haru in his youth, decides to make the move to New York for his grandfather’s sake.
Ren has no problem staying in the US, as he was actually born there, and has dual citizenship. His father mysteriously disappeared when he was a baby, and his mother returned to Japan to raise Ren with the help of her family. Now back in the US, Ren must first find a place to stay. He goes on a grueling apartment hunt that is ultimately fruitless. Frustrated, he sits down to coffee in Soho. As he daydreams, he notices a young woman walk by the café, and he nearly spits out his coffee when he realizes that it is the same girl from his dreams! He follows her, but she disappears into her apartment building before he can catch her. As he’s standing in front of her building, wondering what he would have said if he’d had the chance, another young woman approaches. She asks if he’s the guy who called her to see the apartment. Ren jumps at the opportunity to get inside and tells her that, yes, he’s the applicant.
The young woman introduces herself as LUCY HAWKINS, a struggling actress originally from Beverly Hills who was recently cut off financially from her daddy, hence her need for roommates. She shows him around the apartment, which is not an unreasonable price for Manhattan. Lucy calls for her roommate to come meet the new applicant, and Ren is shocked to see that it is his dream girl. Her name is MORGAN FISHER, an intern at a little New York newspaper, but she seems to have no recognition of Ren. He suddenly feels stupid for thinking that she might. It was only a couple of dreams, after all. The three of them seem to get along, however, and the girls offer Ren the room.
When Ren moves in, he has some opportunity to get to know Morgan, but he is dismayed when she introduces him to her boyfriend, TYLER McMULLEN, a quarterback at NYU. Tyler, somewhat threatened by the new male presence in the apartment, suggests to Ren that he keep his distance from Morgan. Morgan, however, doesn’t seem to be keeping her distance from Ren, at least not in his dreams, which continue over the next few weeks. Finally, he decides to confront her in the dream(after all, it's just a dream, so what does he have to lose?), but she runs away. He attempts to follow, but something strange happens. He feels as if he's passed through some sort of barrier, and the dream has changed. It's no longer his own! Morgan seems shocked by the fact that he has followed her, and pushes him. He falls back, returning to his own dream.
The next day he decides that something strange is definitely going on. He confronts Morgan, but Tyler interrupts to take Morgan out. Before she leaves, Morgan tells Ren that she'll meet him that night... in his dreams.
True to her word, Morgan shows up, but remains vague on how it is she's been visiting his dreams. Instead, she takes him to meet the man who mentored her. Ren is shocked to learn that this man is his grandfather, Haru! Haru explains that the Matsuo clan is a long line of dreamhoppers, and Ren must now embrace this heritage, for there is a great evil afoot in the dreamworld and it is up to the Matsuo clan to stop it. This evil is in the form of a monstrosity called Xibalba.
Over the next few weeks, Ren trains with Haru and Morgan in the ways of dreamhoppers. The first important lesson that Ren learns is that each dreamhoppers has something known as a "trueform," his physical appearance in the dreamworld that no other can mimic, and is a reflection of the person he is on the inside. Only in this form can a dreamhopper use his powers. Once Ren has learned how to take his trueform, as well as some of the basics of the dreamworld, the time finally comes for him to leave the safety of Haru's mind. Haru is too weakened escort him, so he sends Ren out with Morgan and another trusted disciple. To Ren's dismay, this other disciple turns out to be Tyler! Though neither is happy to work with the other, they--along with Morgan--set out to explore the dreamworld. The exercise goes well until they are fallen upon my Nightmares, the creatures that lurk the dreamworld and cause bad dreams. His guides warn him that Nightmares can actually kill dreamhoppers when they are outside their own minds. Fortunately, Morgan is from a clan that specializes in battling Nightmares, and she manages to dispatch them with some help from the others.
Once Ren's training is complete, Haru tells him of his quest. Xibalba seeks an artifact from the old ages that will allow him to take his trueform in the real world, where he will be unstoppable. This artifact is known as the TRANSAXIOM. In order to get the Transaxiom, a gateway must be opened, but he this requires five keys. The five "keys" are actually objects of power, relics left over from a time when the real world and dreamworld were still dividing. Haru believes that these objects are hidden in New York. The task of Ren and his companions is to find these objects and recover the Transaxiom before Xibalba can.