A country of riotous colors and monochrome lives, Japan craves a license to dream. No wonder its animated feature films are full of incredible transformations, bizarre juxtapositions, and anarchic narratives, all of which offer freedom that’s impossible in the waking life of a strait-laced Confucian society. But what happens when fantasies turn toxic? That’s the plight of hard-boiled detective Toshimi Konakawa, a stock movie character who’s trapped in a nightmare of stock movie threats. In the opening moments of Paprika, Konakawa (voiced by Akio Ohtsuka) is menaced by an evil circus ringmaster and then transported into a jungle, a train, and finally a corridor—where he’s murdered.

He’s not really dead, of course; the old myth that people who dream of their own demise will actually perish isn’t true. But Konakawa is shaken by his recurring hallucination, which is why he’s sought the help of a counselor (voiced by Megumi Hayashibara). Her card says her name is Paprika, but that may be the orange-haired, red-T-shirted sprite’s identity only when she’s in a sort of dream state. Incredible transformations, remember?

All this happens in the prologue to Paprika, the new anime feature from Millennium Actress director Satoshi Kon. Much form-shifting and mind-bending ensues—so much, in fact, that the movie sent some viewers reeling from the theater at the screening I attended. The story, adapted by Kon and co-writer Seishi Minakami from Yasutaka Tsutsui’s serial novel, is complicated but fundamentally comprehensible, especially to people well-grounded in anime’s metamorphic disposition. But the plot matters less than the experience, which can only be described as psychedelic. The film’s essential metaphor is a parade of objects that burst from the collective dream world and threaten to overwhelm a large, Tokyo-like city. The procession jumbles traditional objects—geisha dolls, beckoning cats, the gate of a Shinto shrine—with modern gadgets. It’s Japan’s overflowing East-West fusion of stuff, marching to blow your mind.

Nominally a sci-fi adventure, Paprika does offer a “scientific” explanation for the chaos. Dr. Atsuko Chiba, ruddy Paprika’s pale counterpart, has just learned that three DC Minis have been stolen from the institute where she works with the device’s inventor, blubbery genius Dr. Kosaku Tokita. The DC Mini resembles the iPod, an only moderately mind-controlling gizmo, but the apparatus allows its controller to enter other people’s dreams. Designed for benign psychiatric therapy, the DC Mini can potentially cause enormous mischief. So Atsuko, Paprika, and others—including detective Konakawa, an old pal of the institute’s director—search for the thief and missing DC Minis, a pursuit that can take them into their own nightmares.

Some of the details of this quest are disappointingly routine. There’s a scene where our heroine is pinned like a butterfly and molested by tendrils (a common form of sexual assault in the smuttier precincts of anime), and the climax is basically a Godzilla-like attack in which an outsize mutant trashes a major city. Much of the time, however, Paprika is witty, vivid, and delightfully illogical. Dreams invade life, delusions become movie scenarios, and people keep on ch-ch-changing. Like the director’s camera, or the animator’s pen, the DC Mini is a means for giving shape and weight to fantastic visions.

At one point, Konakawa enters a Web site that turns out to be a nightclub. Paprika, who’s already there, asks him if he sees the similarity between dreams and the Internet. Yet Kon seems less interested in virtual reality than in movies. The director’s previous film, Tokyo Godfathers, was based on a scenario filmed twice by John Ford (Marked Men in 1919, Three Godfathers in 1948), and Konakawa’s inner multiplex plays mostly classic Hollywood fare, from Tarzan to Hitchcock. (The detective visits an actual theater, where Tokyo Godfathers is among the attractions.) It seems that Konakawa’s underlying conflict is with cinema, which he used to love and now professes to hate, not with the perilous dreamscapes entered via the DC Mini. Amid Japan’s cross-cultural mayhem, of which Paprika is a prime example, Kon suggests a Zen-like solution to overstimulation: Accept your dreams, and they will not harm you.