High school student Yumeji Fujiwara has the ability to see people's dreams. Despite the visions never appearing clear or concrete, he is able to predict them by sensing the person's "aura." Normally, this skill is a fun trick to play on his classmates, but Yumeji only ever sees himself having the same nightmare every night.

To his surprise, the nightmare continues in the middle of the day even before Yumeji has fallen asleep. The unexpected event was triggered by a dream demon—an inhabitant of the world of dreams who wants to use Yumeji's body as a vessel to fully enter the real world. However, Yumeji is saved by the timely arrival of Merry Nightmare, another dream demon who can somehow physically manifest without a host and is instead trying to return to her own realm.

As more dream demons continue to push into reality, it is up to Yumeji and Merry to fight back against the invasion before everyone's nightmares materialize.

As the source material was still ongoing at the time, Yumekui Merry received an original ending. The director of the series, Shigeyasu Yamauchi, made a comment during an official talk session saying that he had regretted how the anime adaptation had turned out. Following this announcement, original creator Yoshitaka Ushiki made a statement on his official Twitter expressing his disappointment about the director's comment.

The series was released on Blu-ray and DVD as Dream Eater Merry by Sentai Filmworks on March 27, 2012.