Paul Marsh is yachting on the Spanish coast with three companions when a freak storm causes their boat to founder on the rocks. Paul goes to a nearby village to get assistance, as two of his friends have been trapped in the boat's wreckage. He notices that the locals seem odd, and their behavior grows increasingly strange. When Paul begins seeing a mermaid who has appeared in his nightmares, he realizes that the fearful world of his dreams is now a reality.
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