Dream House

Peter Ward (Daniel Craig) is a mental patient who recently left a psychiatric hospital and then a halfway house. Five years earlier, his wife (Rachel Weisz) and daughters Trish and Dee Dee were murdered at their home. During the attack, Peter was shot in the head, and so he has no memories of the murders. Instead, he has created a fantasy world in which his wife and daughters are fine. In his fantasy, he is a successful book publisher named Will Atenton. This is where the movie begins, and the audience is led to believe that Atenton and his family are real, but of course, they are the figments of a mental patient's imagination. Peter moves back to his abandoned old house and lives inside. It is boarded up and unsafe and covered with grafitti, but in Peter's disturbed mind, the house is gorgeous and his wife and kids live there happily.

Peter begins to re-connect with his old neighbors, including Ann Patterson (Naomi Watts). In his mind (as Will Atenton), he is meeting Ann for the first time, but to her, she recognizes Peter as an old neighbor and wonders why he is living in an unfit house. She begins to realize that Peter is still insane and that he is imagining that his dead family is still alive in the house. He speaks as if everything is normal, and this alarms Ann.

Within Peter's delusion, Trish and Dee Dee start seeing a man watching the house from the front yard, and Will and Libby find evidence that something has happened to the house's previous owners. Will eventually discovers that, years prior, a woman named Elizabeth and her daughters Beatrice and Katherine were murdered, and her husband, Peter Ward, was the main suspect, but was let off because of lack of evidence. Will starts believing that Peter Ward has returned and is stalking his family, and starts searching for more information about him.

Will's research leads him to the psychiatric hospital where Peter Ward was committed after being arrested for murdering his family. There, Will discovers that he is Peter Ward, and created a new identity for himself in order to cope with the grief of his family's death. In turn, the audience learns that everything that has occured up to this point in the movie was just fantasy. He is informed by the doctors that he claimed he was innocent. He returns to his house, which is actually abandoned and decrepit, and converses with the projections of his wife and daughters, who claim that they believe in his innocence.

Peter eventually becomes closer to Ann and Chloe, and discovers that they were friends of his family. Ann believes in his innocence and encourages Peter to live a new life in order to heal himself. Peter eventually decides to return to his old house to confront his memories and, with Ann's help, realizes that he did not kill his family. It was a local man named Boyce (Elias Koteas), who broke into the house and shot Peter's daughters. During the fight, Elizabeth tried to shoot Boyce and accidentally shot Peter, allowing Boyce to recover the handgun and kill her. Peter was then accused of the murder.

Peter and Ann are suddenly attacked by Boyce and Jack, who reveals that he had hired Boyce to kill Ann so he could get revenge against her for divorcing him. Boyce got into the wrong house and accidentally killed Peter's family. Jack decides to kill Ann and set the house on fire, framing Peter for her murder, and shoots Boyce's legs as punishment for his early failure. As they try to ignite a fire, Peter escapes, overpowers Jack and saves Ann. Boyce douses Jack in gasoline in revenge for being shot, but Jack shoots him in the head before being consumed by the flames.

While Ann and Chloe reunite, Peter confronts the ghosts of his wife and children, who forgive him and say goodbye. Peter escapes, having finally discovered the truth and gained inner peace.