Yumeji has a unique talent; he can predict his friends' dreams by reading their auras. But this special ability makes him a target for a sinister force trying to use him to enter the real world. An unlikely ally appears when Merry, a donut-loving dream demon desperate to return to her own world, literally falls into his lap.
Yumeji learns that a Dream Demon called John Doe needs his body to access the Real World. When a beautiful girl suddenly drops in - literally - she reveals that she is a Dream Demon who needs to return to her own world.
Having escaped from John Doe, Yumeji takes the unconscious Merry to the Tachibana house for shelter. Meanwhile, a sinister force in the Dream World is attacking benevolent Dream Demons and their human hosts.
Minato has a “friend” that she only sees at night -- a Dream Demon named Ichima, with dark ulterior motives. Yumeji and Merry have met Minato just as Ichima makes her move to take over Minato’s body.
While Isana attempts to make friends with Chizuru, the Literary Club goes out to karaoke. Merry tags along and discovers the captain of the Literary Club is getting a lot of weird emails.
When Isana sends Yumeji and Merry to do some grocery shopping, they encounter the most powerful Dream Demon they’ve met yet. But Engi ThreePiece isn’t a typical Demon. She’s on a mission - a mission that seems in line with Merry's own efforts.
Merry and Yumeji manage to drive off Engi ThreePiece, but their victory comes at a price as Yumeji is severely wounded. While he’s sleeping he has another encounter with John Doe. However, John is there to heal, not hurt..
Yumeji, Isana, Merry and their friends head to the beach for some much-needed R&R. Merry is still struggling with Engi ThreePiece’s revelation.
After the beach trip, Yumeji’s ankle is still bothering him, so he visits a local doctor. While he’s there, he discovers the doctor’s granddaughter is Yui, the girl possessed by Engi ThreePiece.
Seeing how much Merry and Engi are disturbed by Landsborough’s taunts, Yumeji ends the daydream, leaving Landsborough still in possession of his human vessel. Mr. Iijima reveals his true characters as he preys on the dreams of high school students.
Yumeji enlists the aid of Engi and Yui in trying to determine the intentions of Isana’s Dream Demon. Despite her own Dream Demon’s disdain, Chizuru is increasingly concerned about her new, and only, friend. The showdown with Mistltein is looming.
Yumeji amd Engi learn that Palate is a harmless Dream Demon that has been stranded in the Real World, much like Merry. The problem with sending him back is that he’ll likely take Isana’s dream of being an artist with him, whether he means to or not.
Final exams are over, and while most students are getting ready to enjoy their summer break, Yumeji and his friends are preparing to defend Isana from Mistltein.
It’s the final battle against Mistltein. Can Yumeji and Merry to save Isana and her dream of becoming an artist? It’s a struggle to keep hope and dreams alive against the overwhelming power of true evil.