Nemo, played by Marlow Barkley, is a young girl living in a lighthouse with her father, Peter, portrayed by Kyle Chandler. Since her mother passed away during her childhood, Peter has taken it upon himself to teach her the ins and outs of maintaining the lighthouse while captivating her with thrilling bedtime tales about his adventures featuring a character named Flip. These stories include quests for a cave filled with magical, wish-granting pearls and navigating the perilous waters known as the sea of nightmares.
One fateful day, as a storm brews, Peter ventures out to assist a distressed boat. Amid this chaos, Nemo experiences a terrifying nightmare where she sees her father being taken by a squid-like creature. Upon waking, rather than comfort, she learns from Carla, played by Yanna McIntosh, that her father is now lost at sea. To ensure Nemo's well-being, Carla reaches out to Nemo’s uncle Philip, played by Chris O'Dowd, urging him to take her in before she is placed into state care. Philip, who is shown to lead a dull and unfulfilled life, reluctantly agrees.
Things take a fantastical turn one night when Nemo's stuffed pig comes to life, transporting her to Slumberland, a magical realm between dreams. Here, she encounters Flip, an unscrupulous yet charming outlaw who bears a striking resemblance to Peter's stories. With horns and sharp teeth, Flip reveals he is a former friend of Peter’s and is familiar with Nemo's longing to see her father. He asks her about a mysteriously magical map that she doesn’t know about but assures her that he can help reunite her with Peter if she retrieves it. Unceremoniously, Flip pushes her off a cliff to wake her up, marking their first chaotic encounter.
Back in her waking life, Nemo struggles to adapt, feeling isolated at school. She meets school counselor Ms. Arya and a fellow student named Jamal. Ms. Arya encourages Philip to connect more with Nemo, leading him to teach her lock-picking skills in an effort to bond. Eventually, Nemo discovers the map hidden behind a painting in her belongings sent from the lighthouse. Marking herself on the school app for a short trip, she sneaks back into Slumberland while claiming to be at school.
Once back in Slumberland, Flip reluctantly agrees to guide Nemo to the pearls, as they embark on a perilous journey through the dreams of others. The duo must navigate dangerous landscapes, encountering not only fantastical wonders but also mighty threats such as a cloud of smoke resembling a Kraken, embodying Nemo's father’s nightmare. Flip explains that nightmares can ‘smell’ fear, which intensifies their chase through these dreamscapes. Their escapades soon catch the attention of Agent Green from the Bureau of Subconscious Activities, who is determined to imprison Flip for his refusal to wake up and his intrusion into dreams.
Following tense encounters with Agent Green, who warns Nemo that the dreams are not under her control, she faces a pivotal moment. In the waking world, Philip shows her an old video of himself and Peter, revealing that Flip is actually Philip’s dream alter-ego. With this revelation, Nemo realizes that Philip, who has always lived in the shadow of Peter, created Flip to escape his loneliness. Understanding the gravity of her mission, she returns to Slumberland to rescue Flip from the clutches of Agent Green.
Their escape is fraught with peril as they navigate back to the lighthouse. While Nemo tries to wish for the pearls, she is forcibly awakened by Ms. Arya. Yet, her desire to reconnect with her father and find the pearls propels her to sneak back out to the lighthouse once more. After a skirmish with the nightmare, Flip arrives in a makeshift airplane, allowing them to crash through dream layers, igniting chaotic awakenings among the dreamers.
As the climactic storm rages on in the waking world, Philip bravely steps up, diving into the turbulent waters to save an unconscious Nemo. In Slumberland, Green commends her for her resolve, gifting her another pearl that allows her to reunite with Peter one last time. Their heartfelt goodbye strengthens Nemo’s resolve to embrace life and the waking world.
In the end, she awakes to find Philip transformed—imbued with the adventurous spirit of Flip. Armed with newfound confidence, Nemo begins to rebuild her life, forging friendships and nurturing a closer bond with her uncle, while they set sail using one of Peter's boats.
