One night, the boys, Webby, Lena, and Violet have a sleepover at McDuck Manor, which Lena uses as a celebration of her 1-year friend-iversary with Webby, which she has spent all week preparing for. The group party until the early hours of the morning to the point of exhaustion, but Lena at first refuses to go to sleep. Privately, it is revealed that she has been unable to sleep due to recurring nightmares involving her Aunt Magica beckoning to her, and her fear of turning into Magica. Webby convinces her that she needs some rest, and the group all go to bed together.
To their surprise, they wake up on a tropical island that does not seem to follow any logic, which they realize is a lucid shared dreamscape. Violet theorizes it is influenced by Lena's sleep deprivation affecting her magic. Lena admits to her nightmares, claiming she didn't want to foist her problems on her friends, though she stops short of explaining what her nightmares are about. The group quickly takes advantage of the dreamscape to have some fun by going to their different dream worlds: Dewey takes them to his dream of musical high school, Louie shows them his dream of being a cat, Huey has a dream about having impossible long limbs (which turns into more of a nightmare), and Violet dreams of being in a quiet library reading; eventually they simply montage (literally) into an adventurous dreamscape. Throughout this, however, Lena finds herself stalked by the specter of Magica de Spell, who repeatedly possesses aspects of her friends' dreams to beckon her.
When it comes to Lena's turn to show a dream, she is transported to a castle-like location, where she learns Magica has in fact been possessing her dreams. Magica claims their connection is inevitable and that her friends will always fail her, and demonstrates by transforming Lena into a doppelganger of her. Lena's friends, thinking she is Magica, immediately attack her and call her a monster, breaking her spirit further. However, Webby soon realizes who she is when Lena saves her from a falling chandelier and spots the friendship bracelet she made, and with the help of her friends stops Lena from willingly giving her magic back to Magica and free themselves from the dreamscape.
Upon finding a now insane Magica on the McDuck Manor grounds, the group learns that Magica's possession of Lena's dreams was actually thanks to using a telepathic helmet and not actual magic, proving she is completely powerless.They soon met Magica outside, where she tries to make Lena to take her hand from the shadows, before revealing herself to be barely healthy physically (and seemingly mentally too), but Lena refuses. Satisfied that she truly is not like Magica, Lena and the rest of the group return to the Manor while Magica pathetically vows revenge.
- David Tennant as Scrooge McDuck
- Danny Pudi as Huey Duck
- Ben Schwartz as Dewey Duck
- Bobby Moynihan as Louie Duck
- Kate Micucci as Webby Vanderquack
- Catherine Tate as Magica De Spell
- Kimiko Glenn as Lena
- Libe Barer as Violet Sabrewing
- Toks Olagundoye as Mrs. Beakley
- Susanne Blakeslee as Miss Quackfaster
- Phooey Duck makes his debut, albeit as a dream construct conjured by the triplets.
- Phooey's clothes color is also a reference to Dewey's original clothes color when he was first designed.
- Lena's wolf form bears a striking resemblance to the wolf from The Sword in the Stone.
- The title is a reference to A Nightmare on Elm Street.
- Lena is technically barefooted for the entire episode, since she's only seen wearing her normal clothes in dream world.
- Louie as a cat during his dream bears a resemblance to Garfield.
- Magica's candy apple form is a reference to the Poisoned Apple from Snow White and the Seven Dwarfs.