Krank, portrayed by Daniel Emilfork, is a sinister and intellectually gifted entity crafted by a scientist who has since disappeared. A significant aspect of his existence is his inability to dream, which leads to his rapid aging. Residing in his lair located on a decrepit oil rig—alongside the scientist’s other bizarre inventions, including six innocent clones, a dwarf named Martha, and a brain preserved in a vat named Irvin—Krank utilizes a device designed to extract dreams from children. These children are snatched from a nearby port city by a cyborg cult known as the Cyclops, who are in turn rewarded with mechanical enhancements such as eyes and ears.
Among those captured is Denrée, the adopted younger brother of the carnival muscleman known as One, played by Ron Perlman. In a twist of fate, after a brutal encounter leaves the carnival's manager wounded, One finds himself enlisted by a gang of juvenile delinquents—led by conjoined twins collectively referred to as "the Octopus"—to perform a heist. Although the robbery initially succeeds, disaster strikes when One becomes distracted by the sight of Denrée's abductors, resulting in the safe being lost in the harbor. Determined to rescue Denrée, One teams up with a plucky orphan girl named Miette, portrayed by Judith Vittet. They attempt to penetrate the Cyclops's stronghold, but their mission falters, leading to their capture and impending execution.
Meanwhile, the Octopus orders Marcello, a circus artist portrayed by Jean-Claude Dreyfus, to bring One back to them. Using trained fleas that unleash a venomous capsule inducing ferocity, Marcello incites chaos among the Cyclops guards, facilitating his rescue of One. Tragically, Miette sinks into the harbor but is miraculously saved by a diver suffering from amnesia, who resides in an underwater dwelling.
Emerging from the diver's sanctuary, Miette seeks out One and Marcello, who are drowned in their own despair at a local bar. The moment she reveals herself alive, Marcello, boiling with guilt, allows One to accompany her. Yet, their escape is thwarted by the Octopus, who wields Marcello's stolen fleas to incite violence in One against Miette. A dramatic sequence triggered by Miette's tear culminates in a ship physically crashing into the pier, diverting One's aggression. With Marcello's help, chaos ensues as they slip away to continue their quest for Denrée.
In a cleverly twisted scenario back at Krank’s oil rig, Irvin manipulates one of the clones into broadcasting a desperate cry for assistance, encapsulated within a bottled dream. This plea reaches One, Miette, and the diver, initiating memories of his past as the scientist who devised the oil rig as a laboratory. After being assaulted and thrust into the water by Krank and Martha, the diver is determined to return to the scene and thwart the villains, while One and Miette set out to save Denrée.
A fierce confrontation occurs as Miette narrowly escapes death by Martha’s hand, who is in turn killed by the diver feigning an "allergy to iron." Miette discovers Denrée unconscious within Krank's dream-extracting machine and learns from Irvin that to free him, she must delude herself into the dreamscape. Within this dream world, she confronts Krank and negotiates to substitute Denrée as a source of inspiration. Although Krank is skeptical of a trap, his arrogance leads him to believe he’s the one in control. Miette ingeniously manipulates the dream into an endless cycle, subsequently obliterating Krank's psyche.
As One and Miette liberate the captive children, the deranged diver prepares to detonate the rig with explosives, fastening himself to its structural leg. Just as clarity dawns upon him, imploring his remaining creations for rescue, a seabird inadvertently lands on the trigger mechanism of the explosives, culminating in an explosive finale that claims both the diver and the oil rig.
