Alex Gardner (Dennis Quaid) is a psychic who has been using his talents solely for personal gain, which mainly consists of gambling and womanizing. When he was 19 years old, Alex had been the prime subject of a scientific research project documenting his psychic ability, but in the midst of the study, he disappeared. After running afoul of a local gangster/extortionist named Snead (Redmond Gleeson), Alex evades two of Snead's thugs by allowing himself to be taken by two men: Finch (Chris Mulkey) and Babcock (Peter Jason), who identify themselves as being from an academic institution. At the institution, Alex is reunited with his former mentor Dr. Paul Novotny (Max von Sydow) who is now involved in government-funded psychic research. Novotny, aided by fellow scientist Dr. Jane DeVries (Kate Capshaw), has developed a technique that allows psychics to voluntarily link with the minds of others by projecting themselves into the subconscious during REM sleep. Novotny equates the original idea for the dreamscape project to the practice of the Senoi natives of Malaysia, who believe the dream world is just as real as reality.