After Matt Amsterdam falls asleep in the guest bedroom of his home, he enters the dream world where his reality begins to constantly change. Every time, he runs not only into a girl named Lacie, but two teenage boys dressed in black. The two teens chase him as he continues to go through different scenarios, from being eight years old in a circus troupe family, to turning into a monster.
Eventually, Matt is confronted by Lacie and the two boys named Bruce and Wayne, who reveal themselves to be the reality police. Due to Matt sleeping in the guest bedroom, he accidentally created a reality warp that continues to change not just Matt's reality, but the entire world. The only remedy is to put Matt to sleep forever. Before they can give him a potion to put him in permanent sleep, Matt falls asleep on his own and changes into a squirrel, managing to escape. Eventually, Matt finds a way to sneak back into his own bed and restore reality to its rightful setting. However, after waking up, his mother tells him that his bedroom is now the guest bedroom.
The episode is significantly different from the book. Matt sleeps in the attic bedroom and, like the book, warps to different reality scenarios. From being a professional hockey player, to a surgeon, to having to diffuse a bomb. All the while, he is being chased by two adults dressed in black suits. Lacie is absent from this version of the story. They eventually catch Matt and take him to the reality judge. For his constant complaints and besmirching of reality, the judge almost sends Matt into some sort of abyss, before Matt is woken up by his mother. However, Matt once again insults reality before going to sleep, meaning he has to go through this all over again.
References in Other Media
The reality police do not physically appear in the Goosebumps film, but during the end credits of the film, on the animation for A Shocker on Shock Street, there's a street sign that says "Reality Police Department". There is also an achievement in Goosebumps: The Game called, "Don't Go to Sleep!".