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The setting is the Silver Star Teahouse in pre-WWII Japan, in the 1920’s. The proprietors of the teahouse are a young woman named Mizuki, and a Baku (dream eater) named Hiruko. Despite taking place in a teahouse, most people don't come for the beverages.
They come to see Hiruko, to ask him if he can help them get rid of their nightmares. He usually does, and the only payment he asks is to eat the nightmare afterwards, so it’s a pretty sweet deal. How does he help get rid of the nightmares? He puts the customer to sleep and then goes in to the nightmare with them and helps them face or find the cause of their neuroses.
Each chapter is a story revolving around a new customer, and with a few exceptions the stories are only a chapter long. The stories are mostly self-contained, but not entirely; there are threads that run through the manga that tie things together. There's usually a tragic twist at the end of every story, where a client's demise is at the hand of their own character flaws. Don't worry, that isn't a spoiler, but in fact a reccuring theme. Even knowing that things won't end well for the client doesn't prepare you for exactly what happens.