Alice Drake is a very special psychologist, who enters her patients' dreams and battles their fears, which take forms of insane monsters. As the game progresses, she is confused by the fact that the number of her patients suddenly increases, and their fears becomes more and more insane, usually manifesting and creating phobia suddenly, without a proper medical history. As she clears the minds of her patients, she learns of an evil entity, the Dream Devourer, that feeds on human dreams, corrupting them and bringing insanity. Eventually, she is forced to battle in her own mind, where she finds a way to locate the entity. In order to put an end to insanity it brought to the real world, she enters the Dream Devourer's domain and slays it.
Source: Wikipedia, "Dreamkiller", available under the CC-BY-SA License.