Normal boy Mateo realizes he's the defender of dreams against Nightmare King. He faces creatures from dreams crossing into reality, questioning what's real.
Missing Z-Blob, Mateo tries to free him to the neglect of his dream chaser duties. The rest of the team wrestles with an incursion case - a doom sheep running amok in Brooklyn due to lingering rifts between the dream and waking worlds. A flock of unusual ravens ignites Izzie's suspicions, but everyone waves away her concerns, unaware that a nefarious presence is growing in the dream world.
Oz takes the dream chasers to Castle Nocturnia to meet Grand Inspector Royce and his protégé Astrid, who are NOT impressed with Oz's ragtag group. Convinced the Night Hunter is the one who has stolen Izzie, Cooper and Logan's memories, Zoey heads to the Grim Realm. The rest of the team consults the enigmatic Sandman and discovers who's really to blame: the Never Witch.
When the Murky Realm disappears, a student's intense daydream results in dangerous sirens wreaking havoc at school. The dream chasers must keep hapless students and teachers safe and figure out a creative way to lure the sirens back to the dream world. All the while, Mateo faces pressure to meet his dad's new girlfriend.
Wanting to prove himself as a serious musician to Zoey, Logan inadvertently unleashes his 'sick beats' on the dream world resulting in much mayhem. In the waking world, Mateo suspects Jasmin is working with the Never Witch and convinces Izzie to help him prove it as he follows her around the city.
Despite Grand Inspector Royce's orders, the dream chasers go after their missing memories. They try to track one of the Never Witch's ravens back to her hide-out while Phil covers for them at Castle Nocturnia, releasing a swarm of bed bugs to keep Royce distracted.
With realms going missing, the dream chasers feel like they should be taking the fight to the Never Witch instead of training for R.E.M. trials, which isn't going well either. Zoey's haunted by her most painful memories and Mateo continues to only dream craft Z-Blob-related items. The Night Hunter, now forced to work for the Never Witch, mysteriously keeps tabs on the kids in the waking world.
Set in the past, the dream chaser duo Hannah and Beau argue over keeping the Nightmare King's sword or having the mysterious Gnorfs destroy it. While they seek a dream relic worthy to trade for the unmaking of the sword, young Oz searches for Lunia as he ponders his future with the Night Bureau.
Rebuilding a relationship with her estranged dad turns out to be harder than it sounds for Zoey once Izzie convinces her to give him a chance. Logan steps up his training to beat Astrid in the second R.E.M. trial which involves capturing a speedy little alarm clock that looks sweet but has a major bite!
A close call with the Never Witch places Mateo in the forests of Wildoria, a dream realm of beasts, searching for his lost hourglass while his evil doppelganger is sent by the witch to infiltrate Castle Nocturnia. Beau is on an adventure in the dream world with Zoey when the Never Witch orders him to track down Mateo.
Struggling to escape the Night Hunter's cage, Zoey and Mateo are trapped in the Grim Realm while MadTeo competes in a dream crafting duel at Castle Nocturnia. But Izzie is suspicious of MadTeo's true identity, which makes her his first target.
