It is Perihelion Night on the forest moon Verd, and on the morrow, Lady Ria is to be wed to her father’s captain of the guard, Esnic. She has no intention of going through with the wedding, and attempts to flee, taking advantage of the recent gravity decay to fly up through a service shaft and meet her cousin and lover Tonio on the roof. Tonio originally came to Verd to try to reconcile Duke Altero with his estranged brother-in-law, Emperor Exis Umane of Galaxis Bright. However, he now intends only to take his love Ria home, even though the evil inhabitants of Galaxis Dark are threatening war and his father is in seclusion. Tonio’s Lightship is hidden near Gravity Well Six; if need be, he will threaten to use its powerful Vorgon ray to destroy the castle. Before they can escape, however, Esnic tracks them down, captures Tonio and brings Ria before her father, interrupting his meditations. Since the loss of Ria’s mother, Altero has become a cruel tyrant. Infuriated by his daughter’s disobedience and by being woken from his slumber, Altero orders Ria to marry Esnic whether she wishes to or not. Tonio will watch the wedding in chains.

Though many servants have recently vanished from the castle, some remain, and five of them are on their way to Gravity Well Six. Mazy Grace the chambermaid, Gubrious the chaplain, Peterkin the cobbler, Nora the cook and Weed the gardener are rehearsing a play which they intend to perform at the wedding, and they’re going to need privacy; thus, they risk the forests despite the legends of the Nightdreamers, dangerous tricksters who are said to roam free on Perihelion Night. They rehearse the play, unaware that they’re being observed by the puckish Sly, most mischievous of all the Nightdreamers. But even stranger visitors soon arrive, as the TARDIS is attracted to Verd by an intense gravity field despite the Doctor’s efforts to break free. Jo collapses in a fugue, feeling the call of the Nightdreamer King in her mind. Concerned, the Doctor emerges only to be waylaid by the players, who assume that he is a Nightdreamer. When he tries to speak, they assume that he’s trying to trick them and stun him, intending to hand him over to the Nightdreamer King; according to legend, their wishes will then be granted.

Tonio, trapped and despairing, is unexpectedly freed from the dungeons by a familiar old butler who is far more than he seems. Meanwhile, as Esnic drags Ria back to her quarters, she grabs his phaser, stuns him, and disguises herself in his uniform, intending to reach the Lightship and use the threat of the Vorgon ray to force her father to release Tonio. At Gravity Well Six, Jo wakes from her daze to find Sly cavorting inside the TARDIS. She pursues Sly out into the forest and meets Ria, who at first assumes Jo to be a spy for Galaxis Dark. However, when Ria sees the spirit of her mother appear before her eyes and then vanish, Jo’s sympathy for her convinces Ria that she can be trusted. Jo’s claim to have seen Sly is less welcome, however, for Sly is known as a trickster and agent of mischief, whose appearance now is a poor omen.

The Doctor recovers to find the players swimming through the low-gravity air of the moon, on their way to a cave where Peterkin believes the Nightdreamer King can be found. Peterkin knows a great deal about the Nightdreamers, for he lost his brother to them years ago. The Doctor tries again to speak to the players, but they ignore him, fearing that he speaks riddles and questions to confuse them. As they speak amongst themselves, however, the Doctor learns that the Duchess mysteriously vanished some time ago and is said to sleep with the Nightdreamers. When the players reach the cave, Mazy Grace ignores the Doctor’s attempts to reason with her and throws him inside. Swept through the caverns by fluctuating gravity waves, the Doctor is confronted by a vision of a monstrous maw which attempts to consume his mind, but he resists the hallucinatory attack and is expelled from the caverns. Outside, as the players anticipate the fulfillment of their desires, they begin to feel tired -- and Sly then appears, mesmerising them and sending them into a deep slumber. Sly’s own desire will not be granted, however; he cannot work his mischief on them, for the Nightdreamer King requires more servants at once. Sly sprinkles magical dust on the sleepers, who vanish -- captives of the Nightdreamer King, as is Sly.

Tonio swims to Gravity Well Six to use the Vorgon ray to secure Ria’s release, only to find Ria there intending to do the same for him. As the lovers are reunited, the players emerge from the forest and dance to entertain them -- but the dance causes Jo, Ria and Tonio to feel drowsy and Jo realises too late that the players are Nightdreamers. As Jo and the lovers slumber, Sly appears; the newcomers’ minds are strong, and he must addle them before the Nightdreamer King will be able to take them. He thus drips the nectar of the Atinati weed on Tonio’s and Ria’s eyes, ensuring that they will fall in love with the first person to meet their eyes when they awaken. When Tonio awakens, the first person he sees is Jo -- and the first person Ria sees is Peterkin, still dressed as a monster for the play he was to perform.

The Doctor is swept up against a hatchway in the caverns, and manages to open it and enter the castle. Inside, he finds a chamber of sleeping figures, including the players, the missing Duchess, and Altero himself. Altero awakens and drags the Doctor into the throne room, where he accuses him of being an agent of Emperor Exis Umane, come to steal the gravity rocks of Verd for the court of Galaxis Bright; he and Tonio shall face the death penalty for their treachery. The Doctor is dragged out of the court, but he also manages to escape -- with the help of the mysterious old butler, who appears to be conducting a study of the gravity rocks. The butler identifies himself as Munex Axis, a scientist from Galaxis Bright, and explains that Altero fled to Verd after quarrelling with the Emperor over Umane’s wish to open his planet to trade with the planet Galaxis Dark. Altero feared that the Darklings would attempt to exploit and plunder Galaxis Bright, and sadly he was proven right -- and now the Darklings seem to have set their sights on exploiting the rocks of Verd, a natural source of intense gravity which Munex fears has driven Altero mad due to his constant exposure.

The Doctor questions Munex about the Nightdreamer King, but Munex dismisses the story as mere superstition. Unconvinced, the Doctor studies the gravity rocks himself and draws some quite unpleasant conclusions. He takes a sample with him, intending to study it in more detail in the TARDIS -- but this convinces the already suspicious Munex that the Doctor is in fact an agent of Galaxis Dark who wants the rocks for himself. Munex, who has even more secrets than he has yet revealed, contacts Esnic and orders him to kill the Doctor, and Esnic is only too happy to do so. As the Doctor swims through the air back to Gravity Well Six, Esnic pursues him on a rocketbike, but the Doctor wins the ensuing fight and throws Esnic down to the roof of the castle, stunning him. The Doctor completes the journey on Esnic’s rocketbike.

Jo berates Sly for his cruel tricks, particularly as she finds herself tempted by Tonio’s love for her, but she soon realises that Sly too is weary of his tricks but incapable of disobeying the commands of the Nightdreamer King. A wave of gravity decay then sweeps through the forest, and Sly realises that the King’s power is depleting and that he will consume them all. As Jo feels a phantom force tearing at her mind, the Doctor swoops in to rescue her -- but he too nearly succumbs to the psychic attack, and he knows that he will never survive a third. He takes Jo, Tonio, Ria and Peterkin into the TARDIS to shelter from the storm while he studies the rock sample, and confirms his suspicions; it is in fact a flake of skin shed by a Norebo Worm, a legendary spaceborne psychevore which generates its own gravity field in order to draw in its prey. There must be a Norebo Worm hibernating within the moon, and the people who have vanished and become Nightdreamers are feeding it with their dreams, like psychic batteries. The gravity decay, however, suggests that the Worm is dying -- and that it is desperate for energy to stave off the inevitable...

The Doctor takes Jo back to the castle, realising that it is in fact Duke Altero’s spaceship. However, he fears that Altero is already under the Worm’s spell. As they approach the castle they pass through a hallucinatory storm; the Worm is feeding on the dreams of all who remain in the castle. The Doctor crashes his rocketbike, but he and Jo survive and try to reach the Duke; however, Jo spots Sly in the corridors, and, infuriated, sets off in pursuit. Before the Doctor can follow her, he is confronted by Esnic, who has also been possessed by the Worm, and who brings him before the possessed Altero. The Norebo Worm, the Nightdreamer King, intends to feed on the power of the Doctor’s mind -- not to stave off death as the Doctor had thought, but to aid its coming transformation. The Doctor attempts to resist at first, but gives in when Sly arrives, holding Jo hostage and threatening to kill her.

As the Norebo Worm begins to feed on the Doctor’s psychic energy, however, a ship from Galaxis Dark arrives and attacks the palace, as the Darklings finally make their move to conquer Verd. The Norebo Worm strikes back at them with bolts of psychic energy, and as the battle rages its hold over its victims slips. Jo convinces Sly to return to Gravity Well Six and free Tonio and Ria from his spell so they can use the Vorgon ray on Tonio’s Lightship against the Darklings. Esnic, freed from the Worm’s power, reveals himself to be a Darkling agent and tries to shoot Duke Altero, but Munex arrives just in time to shoot and stun him. Munex then admits that he is Emperor Exis Umane in disguise; he came to Verd seeking a reconciliation with his brother-in-law, and although he misjudged the Doctor’s motives at first, he now understands the truth about Altero’s condition.

The TARDIS materialises in the castle as the Norebo Worm summons back Peterkin and Sly, drawing back its agents in order to drain their minds for a final psychic attack against the Darklings. The Doctor is powerless to stop it -- but Ria and Tonio then launch and attack the Darkship with the Vorgon ray, destroying it. The Nightdreamers are all freed instantly, including Duke Altero, but the Doctor realises that this is because the Norebo Worm fed on the energy from the explosion and no longer requires them. Ria and Tonio return, and Esnic makes a break for it in their Lightship but is drawn back down to the moon by the fluctuating gravity and crashes in flames. However, the Doctor successfully launches the castle and retreats to a safe distance as the moon explodes to reveal a beautiful, trans-dimensional winged creature. As the Doctor had come to realise, the moon was in fact the Norebo Worm’s cocoon, and it has metamorphosed into a creature of beauty which bathes the castle’s occupants with waves of well-being before vanishing off into dimensions unknown.

As the sanctum ship returns to Galaxis Bright, Altero, the Duchess and the Emperor are happily reunited, and the Emperor promises to cut off trade with the Darklings once again. The players perform their amateur but acceptable theatrics, and Altero gives Ria and Tonio his blessing. The Doctor turns down the Emperor’s offer of a position at court, and takes Jo back to the TARDIS; once again they will try to reach Metebelis 3, this exciting adventure no more yielding than a dream.