As Francis (Friedrich Fehér) sits on a bench with an older man who complains that spirits have driven him away from his family and home, a dazed woman named Jane (Lil Dagover) passes them. Francis explains she is his "fiancée" and that they have suffered a great ordeal. Most of the rest of the film is a Flashback (narrative) of Francis' story, which takes place in Holstenwall, a shadowy village of twisted buildings and spiraling streets. Francis and his friend Alan (Hans Heinz v. Twardowski), who are good-naturedly competing for Jane's affections, plan to visit the town fair. Meanwhile, a mysterious man named Dr. Caligari (Werner Krauss) seeks a permit from the rude town clerk to present a spectacle at the fair, which features a Sleepwalking named Cesare (Conrad Veidt). The clerk mocks and berates Dr. Caligari, but ultimately approves the permit. That night, the clerk is found stabbed to death in his bed.