Carl Jenkins is cursing the bad weather that's spoiling his holiday in the Welsh village of Ynys Du. He's on his way back from a fishing trip when he sees a light coming from the lighthouse, and then hears a child's laughter. Looking around he sees a child standing on the cliffs, pointing at something in the water. Carl looks in the direction and sees a huge creature that emerges from the sea and attacks him with its barbed metallic claws. Carl feels a sharp pain, then nothing.
The Doctor is working on a tangle of tubes and pipes in the TARDIS console room while nearby Rose is asleep in the chair. The Doctor mutters when the results of his poking are not the ones he expected and when he sees something flashing on the other side of the console he's forced to try something else to fix it.
Rose is dreaming of a giant creature looming out of the water over her but it's not really her: it's a frightened fisherman killed by the monster. She can only watch the creature blow flames then turn to her, while in the background a child laughs. When a huge talon is closing around her Rose wakes up, causing the Doctor to worry and when she tells him her dream he points out that the TARDIS picked up some very odd readings and when a stretch of rocky coast appear on the screen Rose recognizes it from her dream. The Doctor wants to see what's happening so he decides to go there and have a look in person.
The TARDIS lands, the Doctor and Rose go out into the cold Welsh night where they hear a cry like from a terrified baby. Looking for the place where Rose dreamed of the fisherman they find only blood near the sea and in the water. They look around but can't see the creature so they decide to go to the village but while they're on a path they hear a rumbling growl. Using an everlasting match they see a many-eyed creature in the shadows so they try to back away slowly but the creature dives towards them and now they can see its fangs and tentacles.
The Doctor wants to go back to the TARDIS but there's a roar behind them announcing the creature Rose dreamed so they're forced to go off the path and enter the wood because the creatures are too big to go between the trees. They think they're safe when Rose sees a huge centipede looming over her, hanging from a branch. She slips on the wet earth and falls down; the centipede jumps on her but drops on the ground in agony, zapped by the sonic screwdriver. The Doctor helps Rose, his sonic screwdriver held out as a weapon.
The Doctor and Rose run through the wood, monsters of every kind chasing them. A giant mosquito-like creature flies over the Doctor, who batters it away and keeps on running towards the lights in the distance. Eventually they arrive in a road lined with cars and houses and Rose sees the monsters emerging from the trees then the Doctor makes all the car alarms go off with the sonic screwdriver and when they stop the monsters have disappeared. They set off down the hill towards the harbour, still wondering what's happened to the monsters and where they came from.
The Doctor and Rose go into the Red Lion pub, which is full of people. Beth Hardy is working but she hears the sobs of her daughter Ali from upstairs and her husband soothing her, like every evening. In the restaurant area she can hear other people arguing, again. When her husband comes down, he tells her that Ali decided to read a book but Beth knows that she'll get asleep and the nightmares will start again. She's startled when the Doctor and Rose come in while someone else is suspicious about those foreigners who just walked in at that time. Ali comes down to ask her what's happening and shows her the monster she dreamed about. Rose sees the drawing and recognizes the monster she dreamed too.
The villagers are still suspicious so Mervyn, the landlord, demands to see some identification and the Doctor shows them his psychic paper and whatever they see they become eager to accept his help. Beth tells the Doctor that the phones go dead when the monsters come out so they can't ask for any help and they have no proof that any creatures exist. The Doctor tells them about Carl Jenkins’ death but they dismiss it, saying that nobody was hurt before when they stayed inside in the night.
Bronwyn, a lady in her seventies, blames Nathaniel Morton, a retired industrialist recently come back after leaving the village when he was a young man but other villagers dismiss her saying that there's an old feud between them. The Doctor can find no useful information about the lighthouse but people start going away, all in groups for safety, so Rose is put at the inn to have some sleep while the Doctor tries to figure out what's happening around the village and decides that next morning he'll go pay a visit to Nathaniel Morton.
It's morning and a group of kids are close to Nathaniel Morton's house. One of them, Billy Palmer, tells Ali Hardy to go knock on the door and she reluctantly does it then runs back to the others, knowing that now she's part of the gang. Nathaniel Morton is watching the kids from the first-floor windows and with him there's Miss Peyne, who then returns to her duties. He still looks out of the window, thoughtful, and then he moves away on his wheelchair.
The Doctor and Rose have a good breakfast and Rose tells him about the noises she heard during the night. Then they decide it's time to go pay a visit to Mr. Morton. Instead they find the kids, who get worried when Ali tells them that they're staying with her parents. When the Doctor mentions the rectory and monsters they look even more worried and eventually run away.
When they arrive to the rectory they find the door open so they go in and look around until Miss Peyne, who behaves coldly when the Doctor says that they’d like to speak to Mr. Morton, reaches them. She continues being unhelpful until the elderly man arrives and asks for their identities. The Doctor tells him that they're from Cardiff and they're conducting a survey of medical facilities. Morton invites them into his office and on the way they meet two pale figures with faces covered by surgical masks smelling of disinfectant.
When they arrive at Morton's office the Doctor tells him that they'd like to know about his work and its impact on the local community. Morton says that it's just a retirement home for wealthy people with a desire for solitude and there's no real impact on the community. When Rose mentions noises of creatures he laughs, but then stops when the Doctor mentions a death, and says that it's a matter for the police. The Doctor decides that it's time to go so he thanks Morton and tells him that they can find their way out. Instead of leaving they go for a little investigation and when they find the room where the two masked people went earlier the Doctor unlocks the door with the sonic screwdriver.
Inside the big room there are beds with four men and two women apparently sleeping, their skin almost transparent. Their hair wispy and silver, white-coated figures checking on them and the machines they're connected to. When the Doctor goes to check the patients the attendants turn and one pushes him away. Behind them the door is open, Miss Peyne pushes Morton in and he demands to know what the Doctor and Rose are doing. The Doctor says that they just took a wrong turn but Morton accuses them of risking to do some damage and tells them to go away, this time escorted so he checks from his office window as the Doctor and Rose go away and argues with Miss Peyne about their intrusion and about the possible threat they constitute.
The Doctor wants to have a better check at the equipment but earlier he traced the signal jamming the village phones and it came from the lighthouse so he needs to check there as well while Rose can go snooping at the rectory. The Doctor looks for a boat to go to the lighthouse but there's none available. Eventually he discovers that Bronwyn Ceredig's boat might be available so he decides to look for the elderly lady.
Rose is looking for Ali and her friends to ask them for useful information but they seem to be nowhere in the village so she sets off for the modern estate but they're not there either. Luckily Rose hears laughter coming from the woods and eventually she finds them, though they scare each other at the sudden meeting. Talking to them, Rose discovers that they saw people carrying various stuff into the rectory when Morton returned to the village and also that there's a tunnel leading close to the rectory so she asks Ali to show her where it is.
The Doctor finds Bronwyn and asks her to hire her boat. She accepts goes to fetch supplies for the trip. The Doctor looks at the old photos on the table alongside him and he sees that many of them feature Bronwyn as a young woman, some alone, one with a young man and a baby in her arms, others with the baby grown into a small boy. The Doctor notices that nearly all the photos on the walls or in frames feature the boy. He slips one of the pictures into his jacket pocket, then Bronwyn comes back, ready for the trip. They go to the boat, the Doctor wandering what happened in her past.
Meanwhile, the kids lead Rose through the wood to the tunnel and Rose goes into it after asking Ali to stay back and go warn the Doctor if she doesn't return.
The Doctor is finally on Black Island after a complex boat trip that involved repairing the outboard motor. The lighthouse is clearly abandoned so the Doctor wonders why there was a glow from the lamp room the previous night. Bronwyn explains that the lighthouse was abandoned in the 1970s when the last keeper moved and the Doctor takes the occasion to mention Morton moving back but Bronwyn reacts angrily to his name. The Time Lord decides to go on with his research when Bronwyn tells him that she found a cave that wasn't there before. Together they go have a look and when the Doctor stares into the cave he sees a spacecraft.
Rose goes through the tunnel slowly in the darkness. After a while she hears a strange noise, then she sees a light flickering getting closer and closer. Luckily it's just Ali, come with a torch one of the kids had on his keying. Together they go on.
The Doctor reaches the small spacecraft and when Bronwyn follows him in the cave he points at a cluster of circuit boards hanging from an exposed hatch, explaining that it's part of a cloaking device that kept the craft hidden until it was broken by some tide that bashed it against the rocks.
Rose and Ali reach the end of the tunnel and when they get out Rose finds herself in the corner of a courtyard that looks abandoned, the house on the other side. Some metal bins are clustered together along the rear wall, alongside the bin a row of windows: the cellar. After telling Ali to stay in the tunnel, Rose goes to the windows but a noise makes her duck behind a high-backed chair while a door is opened and a white-coated figure emerges, carrying a bag.
The figure crosses the bins and tosses the bag in then hurries back inside the house. Rose goes to one window and tries to look inside, seeing a very normal cellar. Rose thinks that she wasted her time when she notices a bag in a corner and remembers her dream so she checks all the windows until she finds one with a loose catch so she pulls the chair to one side and slips the rod through the gap and levers it back against the brickwood until the window opens with a crack and Rose can slip inside the house.
The old iron padlock on the lighthouse door is shaken apart by the high-frequency sound waves from the sonic screwdriver so the Doctor and Bronwyn can go up to the top, where they find a machine with dozens of tiny lights flickering across complex clusters of controls and a thick cable going up the tower, all throbbing in its activity. The Doctor recognizes a behaviour inhibitor that causes the locals reluctance to look for help but he explains that he's not sure of what it does so it's not safe to just turn it off when lights are turned on all across the machine and the low hum rises in pitch.
Rose gets into the cellar and goes check the bag, discovering blood on it. She starts looking into the bag for more evidence when the generator’s noise in the background changes in pitch. Rose sees a set of steps on the far side of the cellar and on top of them a door that leads into a corridor. Rose hears the noise getting stronger while she walks across the corridor until she can see the machines ranged against the cellar walls and enters the room, where she finds a sort of mission control machine with monitors showing the sleeping patients. Rose decides that it's time to go back but she discovers Miss Peyne watching her and several lab-coated figures appear at her shoulders, trapping her.
The Doctor decides that they better go but night is quickly sneaking up on them and monsters start coming out from the water. Bronwyn comments that it's like that every night after the children go to bed and the Doctor understands that the children are having their nightmares because of the machinery in the lighthouse.
The warders and Miss Peyne take off their masks, just it's their entire face that it's peeled off, revealing dark reptilian skin and gleaming malevolent eyes, definitely alien. They are dark green-grey with wrinkled and ridged skin, a pug-like nose, cat's eyes and sharp teeth in their mouths. Miss Peyne explains that they're the Cynrog and she's a Priest Commander of the Third Cynrog Scientific Militia. When Rose asks her if Morton knows what they're doing she answers that they can go pay him a visit.
Ali waits for Rose for a long time then she thinks that there must be a problem and she goes to the window to check on her so she can see that Rose has been caught and the monsters under the masks. When they're gone she goes into the house through the door.
The Doctor and Bronwyn can only watch the monsters, trying not to attract their attention. Carefully they go back to the lighthouse, waiting for the monsters to look somewhere else or start fighting between themselves. When finally they're inside again the Doctor seals the door with the sonic screwdriver.
Morton is looking at an old picture of himself as a young man, thinking about the past. Peyne brings Rose into his office and tells him what's happened. Rose tells him that the Doctor knows where she is and if she's not back he'll call the police but Morton doesn't look very worried so Rose points out that people are being killed and abducted so someone will notice but Morton dismisses Jenkins' death as irrelevant and tells Peyne to discover everything about Rose.
The Doctor is peering into the alien machine, trying to understand how it's working. Bronwyn is just outside the lamp room and the Doctor is worried about the possible effects the machine could have on her mind. Slowly he figures out how the machine's telepathic transmission must have been picked up by the TARDIS influencing Rose's dream and that it also receives the children's nightmares. He's trying to figure out how to disable the machine's telepathic circuits when one of the creatures smashes the window and attacks the Doctor.
Rose is brought to the room where the other patients sleep and gets connected to the machines.
The Doctor can't reach his sonic screwdriver and uses his coat to hit the creature, making it fall into the night but it flies back renewing its attack, limited only by the impossibility to pull all its body through the window. Bronwyn comes to see what's happening and the creature tries to attack her when it just disappears, just like the others outside.
Peyne tells Morton that the machine is ready and when he nods she turns it on. Rose knows that she's dreaming and things that she'd rather keep buried come to the surface convincing Morton, who's watching on the screen, to go deeper.
The Doctor doesn't know why all the creatures have disappeared but it's a chance to go so he and Bronwyn go back to the boat and they're about to leave when new creatures appear, this time from the Doctor's past and he understands that all of this must be connected to Rose.
Ali follows Rose and her captors, almost getting caught a couple of times. When she sees a nurse come out from the room where Rose was brought and lock the door after her, Ali waits for a while then goes inside, taking the key, and finds Rose apparently asleep so she wakes her up and slowly she comes out from the induced sleep.
Peyne is telling Morton that Rose is too old to be useful and when he objects that her mind contains amazing creatures the alien explains that they were memories of something real because she's an inter-dimensional traveller and the Doctor is a Time Lord. When Peyne tells him about Time Lords' ability to regenerate, Morton can only stare at her.
The Doctor urges Bronwyn to go to Morton's place to save Rose and the woman starts muttering about the old man and doing so she gives the Doctor an epiphany about the situation.
Beth Hardy is totally worried about Ali, knowing where she is after the other kids confessed what she and Rose did. When the Doctor comes in Mervyn is angry with him and when the Time Lord discovers that Ali is with Rose he tells everyone what he found and explains that they must wake up the children and keep them awake until he sorts things out.
Rose still feels dizzy but she leads Ali outside the room trying to find an escape route but the windows are shut tight. When Ali calls her, Rose trips over a cable that goes through the wall into the dining room while most of the others go down to the cellar so she decides to check it out. When Ali tells her she still has the key Rose gets it and locks the room, hoping that the nurses will waste time looking for the key. They cautiously move through the corridors and Rose remembers that there's a fire escape nearby and soon she finds it. Now she has only to open a window and luckily she manages to do it so she tells Ali to go back to the tunnel while she keeps on investigating. Ali goes down the fire escape and Rose sees her going towards the tunnel then goes down the corridor and behind a door she hears a sound like breathing so she opens it.
The children are being waken up so the monsters disappear one after another. Peyne is puzzled by the readings she gets and orders her minions to check the machine.
Rose finds more machinery in the room but this time there's something else: a huge thing that looks like a mass of flesh. When Rose goes closer she can see a sort of face but she can also see that the creature opened its eyes.
The Doctor goes through the wood, knowing that now it's safe, and reaches the tunnel that leads to Morton's mansion. After opening it with the sonic screwdriver, he dives in.
Rose runs away while she's shaking uncontrollably but when she waits for a blow from the creature she realizes that it's dead so she wanders what Morton's really up to.
Ali's waiting for Rose in the tunnel but when she starts hearing a noise coming closer and closer she gets frightened and she starts running until she bumps into something tall and dark. She flails at the thing, lashing out with fists and feet until she hears the Doctor's voice complaining. Ali finally calms down and tells the Doctor about her adventure when Rose reaches them and tells him what happened to her. The Doctor shows her the picture of the little boy he took from Bronwyn and Rose recognizes him, he is the one she dreamed about. The Doctor asks her to discover what happened to the child while he takes care of the alien machinery.
Peyne is told that all the equipment is working so the children must be awake and when Morton asks her what's happening she tells him that the Doctor is interfering. She decides to use Rose and goes to the room where she's supposed to be kept but she finds the Doctor waiting.
Beth Hardy is worrying about Ali's future when her daughter arrives with Rose but her joy doesn't last because Rose tells her that it's not over yet. Mervyn is afraid to put his daughter in danger so he argues with Rose until Ali tells them that she wants her nightmares to end for good.
The Doctor is facing Morton, wanting to know what he thinks he can gain from all of this and Morton brings him to the library, when he introduces him to Balor, God of the Cynrog, Destroyer of Worlds. The Doctor looks at it and sees that it's just an empty body but Morton tells him that it's just waiting for a new soul and when the Doctor asks him what on earth could he gain from all of that Morton tells him about his past, when he was a child and with other children in the wood they saw the starship falling down: they were more curious than scared so they looked for it and found more than they thought because a dying alien came out and they all felt it in their heads, a portion of the alien transferred into them.
The Doctor understands that the sleeping patients are the other children, now restoring what they can of Balor. Only after many years Peyne tracked Morton and he accepted to help her just to have his mind freed but the children had turned into old people and Peyne wanted to recreate a strong Balor, even better than the original, so she decided to use the local children and exploit their young minds with the human violent tendencies in their raw state. The Doctor tries to convince Morton to give up but the old man tells him that he was promised renewal too and he gets troubled only when the Doctor tells him that children will die because their life force will be transferred into him.
Rose and Ali find Bronwyn and Rose asks her about the child: the elder lady confirms that he was her son Jimmy and tells them that he was taken from her by the child protection people because they thought she wasn't good for him and now Morton is making him come back.
The Cynrogs connect the Doctor to the machinery while Peyne tells him that Balor will be unleashed on the Earth and its billions of people will die. When the machinery is activated the Doctor starts feeling out of his body with other minds close to him belonging to Morton and the six sleepers and with them there were Balor's parts, powerful and savage yet incomplete. When the power of the machinery is increased the Doctor feels the presence of a little boy, Jimmy, who tells him that he was taken from his mother because of the monster in her head. The Doctor can see a memory of the spaceship crash where the young Bronwyn went to look at the crater, unseen by the other children but noticed by Balor which means that she's still holding its missing part.
Beth is looking around in the pub when the children drop one after another right where they just stood, causing their parents to fear that the Doctor failed.
The Doctor contacts Rose telepathically thanks to the fact that the machinery operates on the same frequency as the TARDIS and together they put together the pieces of Bronwyn's story then the Doctor tells Rose to bring the elderly lady to the lighthouse.
The creature wakes up and starts her new life destroying all the pieces of machinery around her. Peyne watches on a screen, worried that something's wrong then she goes to the library to greet Balor in person followed by another Cynrog but Balor reacts to their presence with more rage and Peyne has to run away while the other alien is killed by Balor's claws and jaws.
Rose, Ali and Bronwyn have just arrived to the lighthouse when Ali starts struggling to keep awake and Rose suspects that the little girl is once more victim of the alien machinery but she has a task to complete before going to sleep.
Peyne demands to know what the Doctor did and he tells her that it's her fault because she missed one piece of her god so Peyne decides to use some human minds as a replacement, even if they're weak.
Ali is working on the spaceship like Rose told her but she keeps struggling to stay awake. At the bottom of the lighthouse Bronwyn is tired and feels the thing inside her head fighting to be free.
Balor destroys the generator causing a fire and explosions that force the Cynrogs to flee from the fire and the creature's fury. Peyne implores Balor to destroy the Doctor and it recognizes her but it seems that Morton's mind is now in control and he kills Peyne then turns to the Doctor.
Ali announces that she just finished the job. In the village the children wake up, only to find their parents asleep. The Doctor sees that Balor is quickly shrinking until it disappears so he goes out of the burning house where he finds the Cynrogs and gives them an ultimatum.
Bronwyn wakes up as a young woman, ready to receive medical help. After she's taken to the ambulance the Doctor explains to Rose that the woman's rejuvenation was probably caused when the machinery instead of sucking life force out of people to rejuvenate Morton found Balor's missing piece and took the old people's life force and rejuvenated Bronwyn instead and possibly the TARDIS interfered through the telepathic frequency used in common with the machinery. The Doctor also explains that Bronwyn is pregnant and that the remaining pieces of Balor are now in his head. Now he just needs to get rid of the Cynrog.
The children are watching the lighthouse like Ali told them when something emerges from behind it and flies higher and higher into the sky. In the TARDIS the Doctor tells Rose that he sent the aliens quite out of their way to their war and they'll spend some years in their sleep but they'll have some nightmares and when Roses asks about what Cynrogs have nightmares about the Doctor just smiles.