There is something inherently unsettling about a dream.

Not necessarily because of what happens within it, but because of the strange rules governing the experience. Familiar places become alien. People we know acquire unfamiliar faces. Memories surface without invitation. Cause and effect become slippery. And beneath it all is the uncomfortable knowledge that the nightmare is coming from somewhere inside us.

Lucid, the surreal art-punk horror film from Canadian filmmakers Deanna Milligan and Ramsey Fendall, takes that premise and runs headlong into the subconscious.

Set in the 1990s, the film follows Mia Sunshine Jones (Caitlin Acken Taylor), an art student whose creative ambitions are beginning to collapse beneath the weight of a seemingly insurmountable block. With her place at art school under threat, Mia turns to a mysterious lucid-dreaming elixir in the hope that she can unlock the creativity she feels slipping away.

Instead, she opens a door that perhaps should have remained closed.

The resulting descent into dreams, memories and increasingly monstrous manifestations makes Lucid less interested in conventional nightmare mechanics than in the uncomfortable connection between creation and self-examination.

For Mia, the problem isn’t simply that she can’t make art.

It is that she may not yet understand what she is trying to express.

Milligan and Fendall approach this psychological territory with an appropriately handmade aesthetic. Shot on 35mm and Super 8, Lucid has a tactile quality that distinguishes it from the increasingly polished digital language of contemporary genre cinema. The imagery feels deliberately unstable, as though the film itself is slipping between waking reality and the fragmented visual language of a dream.

That is where Lucid becomes most compelling.

Rather than treating lucid dreaming as a convenient supernatural gimmick, the film uses it as a mechanism for peeling away the layers Mia has constructed around herself. The deeper she travels into this increasingly fractured reality, the more difficult it becomes to distinguish between imagination, memory and emotional trauma.

The monsters, consequently, are more than things to be feared.

They are things to be confronted.

One of the film’s most striking ideas is that artistic expression cannot necessarily be separated from the experiences that produce it. Creativity may be liberating, but it can also be invasive. To create something genuinely personal may require confronting the parts of yourself that you would rather leave buried.

That makes Lucid an interesting companion piece to some of the more traditional forms of body and psychological horror appearing at SUFF this year. Where films such as Bagworm externalise transformation through the physical body, Lucid turns inward. Its battleground is the imagination itself.

And imagination proves to be a particularly dangerous place.

There is an undeniable influence of 1990s alternative and underground culture running through the film, but Lucid isn’t simply nostalgic window dressing. Its period setting becomes part of the film’s identity: a world of handmade art, subcultures and analogue imagery that feels particularly appropriate for a story about an artist struggling to discover her own voice. The filmmakers’ use of 35mm and Super 8 reinforces that connection, giving the film an aesthetic that feels deliberately tactile and imperfect.

It is also a film willing to take risks.

At times, those risks work against it. Lucid isn’t particularly interested in holding the audience’s hand, and its narrative can become as fragmented as the dreamscape through which Mia is travelling. There are moments when the symbolism threatens to overwhelm the story itself.

But that is also part of the film’s appeal.

Lucid isn’t particularly interested in behaving itself.

It wants to be strange.

It wants to be messy.

It wants to crawl inside the head of its protagonist and rummage around in the places where memory, fear and creativity become indistinguishable.

And for a film about an artist desperately searching for inspiration, there is something wonderfully appropriate about that approach.

The result is an ambitious piece of independent horror that feels less concerned with delivering a neatly constructed nightmare than with asking what happens when we deliberately surrender control of our own minds.

Sometimes the things we discover there are frightening.

Sometimes they’re grotesque.

And sometimes they are the very things we need to confront before we can create anything worth showing the world.

Lucid may occasionally lose its way inside its own dreamscape, but its willingness to embrace uncertainty is precisely what makes it such an intriguing piece of underground cinema.

SUFF #20

Lucid screens Friday 11 September at 7:45pm in Cinema 3 as part of the Sydney Underground Film Festival’s 20th anniversary program at Factory Theatre, Marrickville.

For more information and tickets, visit Sydney Underground Film Festival.

• Saul Muerte