The less of a mystery something is, the less magical it becomes. This is true of most things. To someone who knows nothing about computers, the idea of the internet is a mysterious, and sometimes frightening wonder. To someone who has never traveled, far off lands seem like an alternate, intangible reality.

This is an idea exploited by fiction, be it books or movies, but seldom explored. It's the basis for myths, ancient religions, who explored how the world might work and why it was created, and sci-fi Hollywood blockbusters, who explore what might lay beyond. Our sense of wonder is what makes us human, and what drives us to discover new things.

And yet, the human psyche is one of the greatest mysteries. There are countless theories behind human logic and emotion, but most of the essence of humanity remains buried deep within us. Since it's something intangible, it's not easy to explore and test new concepts. We may know a lot about our hardware, but to us our operating systems are still some mundane everyday magic.

But in Paprika, Satoshi Kon's new film slated for American theatrical release in March of 2007, Dr. Atsuko Chiba may have cracked the code. As project leader for a breakthrough device, a little 'round-the-ear clip called a DC Mini, she can dive into the dreams of any patient. What she sees is recorded. Data can be analyzed. Problems can be solved. The possibilities for treatment are endless. Sometimes, she ventures out to meet with patients of her own, putting the device and her theories to work.

In one of the film's early sequences, a detective's dreams replay his discovery of a murder victim over and over. A woman named Paprika – a sort of Femme Fatale with a child-like sense of whimsy – is there with him, guiding him towards confronting the scene. She shares more than a passing resemblance to Atsuko. Paprika is clearly not a real person – or shall I say, not a physical body. Atsuko may have multiple personality disorder, but there are hints that this is willful on her part. Paprika allows her to get closer to her patients, to become something of a surrogate mother that can bond with them and understand them.

Chiba's role in the lab is the straight-laced, strict and cold voice of science; it's no wonder she's the team leader, as the rest of the lab is filled with an array of eccentrics. Her closest ally is Dr. Tokita, a morbidly obese “kid in a genius' body”, who invented the device in the short time he wasn't shoveling food down his throat. Despite his appearance, he's a genuinely good guy. But the lab is thrown into a panic when one of the prototypes is stolen. The staff is well aware that if someone can willfully enter another person's dreams, there is no end to the amount of damage that could be done. Almost to prove the point, within minutes of the discovery, the department chief starts spouting nonsense, his eyes become crazed, and he leaps triumphantly from the 5th story window.

This, of course, firmly solidifies the company chairman's belief that his staff may have intruded into sacred territory – the last refuge of humanity that science hasn't reduced to a data fact sheet. He was already close to shutting down the project, and this is the last straw. But with the device in the wild, and in the hands of someone with clear malicious intent, Atsuko can't rest until she knows who this “psycho-terrorist” could be.

As a film, Kon has successfully built on the success of every one of his works, and shadows of each appear here and there. As one of the clear masters of the medium, he challenges us to explore our own preconceptions about who we are, and the worlds we inhabit. Those who have seen Millennium Actress and/or Perfect Blue will feel right at home with Kon's jumps into different timespace, and This Time the nature of the two worlds makes this, his trademark style, almost necessary. While the line between the two worlds inevitably blurs, none of the sense of confusion in Perfect Blue seeps in. Part of the reason for that is Dr. Akiko herself. When she's not Paprika, she's a strong, dignified grounding force; the sort of person that feels like the foundation of both the group of scientists and the film itself. Both incarnations – the straight-laced and unflappable doctor, and the playful and flirty Goddess of Dreams – are played flawlessly by Megumi Hayashibara, who gives her most memorable performance since End of Evangelion.

Madhouse is at the absolute top of their game in this film. Gone are any signs that the 2D and 3D worlds that cohabitate the screen were ever separate entities. The imagery is so lifelike that it almost seems to breathe. But it's the dream world – which has more and more in common with reality – that is truly breathtaking. For fans of anime, not since Princess Mononoke has there been such reason to celebrate.

At the same time, it's difficult to say how the mainstream press and public will react to this film. Despite the visuals, those who have been coddled by the hyper-realism of most live action movies may reject the other-worldliness of the logic and narrative at work here. I suspect there will be a lot of nit-picking about minor plot points they deem to be ridiculous and easily dismissible. I wonder how many people will truly be able to disengage themselves from their realities, as this film demands, and be able to take on the world of dreams with the abandon that their characters do. Like real dreams, the world is a nonsensical mish-mash of life experience, hidden thoughts and agendas, and all the stories and popular culture that make up our lives. Susumu Hirasawa's always unique synthesizer work here is appropriately abrasive and inspiring, quickening the pulse like a well-placed Indian-burn.

After all, Paprika, in this dreamworld, is more or less a superhero, and she brings the film an unrestrained joy. Dreams are a potentially happy thing, and those who have been subverted by the “psycho-terrorist” are almost drunk on the possibilities of this new world that has none of reality's rules. Little effort is made to build suspense or scare us; the characters are too busy with their orgy of delusional delights.

But there's a melancholy in this joy – it's a maniacal, gritted-teeth sort of euphoria that seems to gloss over a deep undercurrent of nostalgia and regret. Kon is quite aware that, for everything we learn, we lose something, and in this modern world of discoveries, it's quite clear we've left something behind.