Henry (Thomas Jane), Beaver (Jason Lee), Pete (Timothy Olyphant) and Jonesy (Damian Lewis) are four friends on an annual hunting trip in Maine. As children, they all acquired telepathy which they call "the line". A flashback shows them as they save a mentally handicapped boy named Douglas "Duddits" Cavell (as a boy, Andrew Robb; as an adult, Donnie Wahlberg) from bullies and befriend him.
Jonesy sees Duddits beckoning him to cross the street, but as he does so Jonesy is hit by a car. His injuries heal with mysterious speed and 6 months later he is able to make the group's annual trip. Jonesy and Beaver meet a man lost in the forest named Rick McCarthy. He is very ill so the group lets him rest inside their cabin nearby. Military helicopters fly over the area and announce that the area will be quarantined. Jonesy and Beaver return to the cabin to find a deceased Rick in the bathroom, the room covered with moss and gore. A large worm tries to escape from the bathroom after being excreted into the toilet by Rick before he died. Beaver attempts to trap the creature under the toilet lid, but the lamprey-like worm, with multiple rows of razor-sharp teeth, kills him. Jonesy escapes from the cabin but runs into a large alien called Mr. Grey, who possesses Jonesy's body.
Nearby, Henry and Pete crash their vehicle as they barely avoid running over a frostbitten woman from Rick's original hunting party. Henry walks for help while Pete stays with the woman. She dies and also excretes a worm, which Pete barely manages to kill. Mr. Grey then captures Pete, but Jonesy telepathically warns Henry to stay hidden.
Henry returns to the cabin to find Beaver dead and the worm that killed him now laying a group of eggs. In order to kill all of the alien larvae he sets fire to the cabin.
Meanwhile, a military unit led by Curtis (Morgan Freeman), seeks to contain everyone exposed to the aliens. Curtis sends Owen to lead an air strike against the aliens crashed spaceship. The aliens use telepathy to distract the pilots, but the four Apaches and Curtis' Little Bird massacre most of the aliens with miniguns and missiles. The alien ship then self-destructs destroying the remaining aliens and two helicopters. Henry arrives at the base as the remaining helicopters land and convinces Owen to reveal the camp to the U.S. Army. After tracking Owen through a chip in his gun, Curtis escapes in a helicopter.
Jonesy retraces his memories of the area while watching Mr. Grey use his body. Mr. Grey tries to coerce Pete into cooperating but cannibalises him when he refuses. Jonesy realizes that Mr. Grey possessed him, not by chance, but to access past memories of Duddits which he needs.
Henry and Owen go to Duddits' home, where he tells them that Mr. Grey is headed for Quabbin Reservoir to seed the water with alien larva. Arriving at the reservoir Owen is ambushed by Curtis' helicopter and mortally injured, but manages to ground Curtis. Henry takes Owen's weapon and kills Mr. Grey's worm. Duddits confronts Mr. Grey, who finally exits Jonesy's body. Duddits then reveals that he himself is an alien and attacks, causing both aliens to explode in a cloud of red dust which briefly resembles a dreamcatcher. Jonesy, now himself again, steps on the final worm that was just about to contaminate the water.
- Damian Lewis as Gary "Jonesy" Jones and Mr. Gray
- Thomas Jane as Henry Devlin
- Jason Lee as Joe "Beaver" Clarendon
- Timothy Olyphant as Pete Moore
- Donnie Wahlberg as Douglas "Duddits" Cavell
- Morgan Freeman as Colonel Abraham Curtis
- Tom Sizemore as Owen Underhill
A box office flop, Dreamcatcher was very poorly received by most critics, earning a 30% "rotten" rating on review aggregation website Rotten Tomatoes based on 166 reviews.
Mick LaSalle's review for the San Fransisco Chronicle summed up the film as "a likeable disaster." Richard Roeper commented that "not since Death to Smoochy have so many talented people made such a mess of things."
Despite the negative press, Dreamcatcher did manage to break even against an estimated $68 million production budget, and while it earned only $33,685,268 in the North American domestic market, it made $75,715,436 worldwide.
In a 2012 interview, during a promotional tour for his film Darling Companion, director Lawrence Kasdan admitted that the commercial failure of Dreamcatcher left him "Wounded careerwise...But not so much personally. I've been personally wounded by other movies, where I'd written it, and thought, 'Oh, God, the world's not interested in what I'm interested in.' With Dreamcatcher, the career was hurt. I was planning to do The Risk Pool with Tom Hanks. I had written the script from a great book by Richard Russo (Nobody's Fool). And it didn't happen. Then another one didn't happen. Meanwhile, two years have passed here, two have passed there. That's how you're wounded."