I won't bother to add to the already monolithic body of glowing reviews of this film; I think it is a masterful work, equivalent to and perhaps surpassing "Blue Velvet" in artistic merit. I am writing mostly because many of those who claim that they hated the film because it "doesn't make sense," or loved it even though it is "open to interpretation" may not have taken heed of the clues David Lynch included in the DVD sleeve. They clearly reveal the logic of the film to those who take the requisite time to think them through. My review is essentially one giant "spoiler," so if you haven't seen the film, take heed.
The film most certainly does "make sense" and follows a completely rational and logistically valid plot structure. The film begins with a stylized jitterbug contest behind the opening credits, showing Naomi Watt's character (Diane Selwyn) winning a trip to LA from her native Canada to tryout for a Hollywood production. We then see the suggestion of a sleeping figure (Diane again) in red sheets prior to the start of her dream, which opens with the hypnotic figure of a limosine traveling down a dark road, containing Diane's idealization of her real-life paramour, Camilla Rhodes. In reality, Camilla is Diane's former lesbian lover, who betrayed her by stealing the coveted role in the film Diane unsuccessfully tried out for, and spurned her affections for the director of the film. Diane is so jealous and infuriated that she hires a hitman to kill Camilla; when the two meet to discuss the deal, the hitman says he will leave a blue key on her coffee table to signify that Camilla has been successfully dispatched. The film's dream sequence begins after Diane has received the key, and Diane's fantasies of a happier outcome are manifest in what we see.
In her dream, she is her idealized self, free of insecurities, more innocent and charismatic--nailing her tryout for the film, but explaining "Camilla's" victory by the influence of the mafia ("Camilla" in the dream is replaced by a woman whom the real-life Camilla tauntingly kisses at a party to infuriate Diane). Other characters who represent real-life counterparts also resurface in the dream, in various roles: "Coco," played by Ann Miller, is actually the film director's mother, the man terrified of the ghoul behind Winkie's is an accomplice of Diane's hired hitman, and the mafiosos played by Dan Hedaya and Angelo Badalamenti were other attendees of the humiliating party where Camilla taunts Diane with news of her engagement to the director. In the dream, Diane refashions her hitman as a bungling idiot who botches Camilla's murder, subsequently leaving Camilla helpless with amnesia for who she is or where she came from so that "Betty," Diane's counterpart in the dream, can become her heroine, and have a utopian, romantic love affair with her.
Throughout the dream, omens occur that suggest the truth behind Diane's fantasy; the forboding man behind Winkie's, Lee Grant's wacko Cassandra-character with her warnings of trouble, the Cowboy, and the MC at the late-night Cabaret who insists that all is not as it seems. The blue key becomes expressionistically rendered in the dream, and opens the proverbial Pandora's Box, at which time Diane mysteriously disappears from her own dream, leaving Camilla alone to open the box--and then Lynch imposes a couple of his haunting frame shifts, here done with lighting effects, before the Cowboy enters Diane's bedroom, telling her "it's time to wake up, pretty girl."
Now we see Diane's reality when she awakens, and evidence of her crushing guilt (notice her initial relief when she hallucinates that Camilla has returned from the dead, and her subsequent breakdown when she realizes the truth). Eventually, the gravity of what she has done overwhelms her when she realizes that the police want her for questioning, and the old couple from her dream, whom I presume represent her conscience, are released by the demon behind Winkie's (that is, she loses her sanity). Her demons chase her to her bedroom, where she hysterically grabs a gun from her nightstand, and takes her own life.
Check out Lynch's clues--there's much more to them than what I've included here. He's a master--I don't think he produces a frame of film without agonizing over it for weeks, and I highly doubt someone who produced something as lovingly detailed as this film let any inconsistencies or gaffes slip past him. What a movie this is--I'll never forget it.
This movie was not intended to be shown in one sitting. Originally conceived as a television drama (much like Twin Peaks), it only became a film when it was not picked up for a television market. David Lynch then re-imagined what he had already created and worked to fashion a film, seeking foreign producers and a distributor that trusted him. While this short history of the genesis of the film does not explain its intricacies, perhaps it will help to soothe the frustrations of someone watching the film for the first time. Can you imagine trying to piece together the entire history of the X-Files in one 3 hour sitting? It would be difficult at best. In my opinion, one big clue to the movie is in the opening shot (not the beginning credits, but the first "film" frame). It is of a pillow and a sheet...that quickly dissolves into a rather nostalgic ride down Mulholland Drive (the road that runs behind the famous HOLLYWOOD sign). The movie does not return the viewer to that shot ... of the pillow again until Diane wakes up nearly 5/8's of the way through the film. It can be assumed that this whole portion of the film has been one long dream, a dream that gives us a great deal of insight into the personal desires and fantasies of Diane. The rest of the film is a mish-mash of (in my opinion) drug-induced daydreams and paranoia, seen through the beer-bottle goggles of Diane. She over-emphasizes the importance of things she is suspicious of, and sees things that are not really there--ultimately leading to her making some bad decisions that she cannot deal with. Several characters appear in both worlds (the dream, and the warped/drug altered reality of the end). These characters, we assume, have had some kind of impact on Diane's life. Her fantasy/inner vision of the characters is seen in her dream, the somewhat-subjective reality of them revealed only in the latter part of the film. There are really only two characters that are enigmas: the person behind the diner, and the cowboy. In my opinion, the person behind the diner represents a drug dealer (making things happen) whom Diane buys from (who controls Pandora's box). The cowboy, to me, represents the simple, logical, American person that Diane hopes is out there, striving to right the wrongs of LA. The dream sequence is Diane's subconscious exploring her feelings for the people and places in her life, and rewriting her experiences in a version she likes better (she is an amazing actress, who is only deterred from certain stardom because of a conspiracy, and who loves someone that would love her fully too, if only she really knew who she was). When she wakes up, she must then come to terms with her life, and muddle through the confusing haze of people and relationships in her life within LA culture...confusing matters incredibly with her drug/fantasy/day dream visions. The movie is a masterpiece of writing, direction, cinematography, and ultimately conviction to telling an unconventional story...Lynch, Herring, Watts and others never waver in their commitment to the story...even when it gets scary, erotic, or convoluted. The result is an incredibly entertaining and though-provoking experience that will leave you wanting to see it again and talk to others about it. The casting is largely from television actors and recognizable faces (no doubt attributed to the fact that the film was originally going to be a television series), revealing and introducing some amazingly talented actors and actresses (Naomi Watts--clearly stretching beyond the matronly parts she has previously played, Laura Elena Harring, Justin Theroux, and Dan Hedaya in the most obvious occurrences). The DVD is an interesting example of the mind of David Lynch. It was his express directive that there be no chapter breaks in the movie. It was also his express directive to disallow additional information beyond a cast list and the trailer. His reasoning is that the additional material detracts from the experience of the film. And in this case, he is right. The additional material would allow the viewer to remove him or herself from the film, reminding them that it all was make-believe and without meaning. In his own way, by starving the viewer of these extra tidbits, Lynch has created even more of an enigma for viewers to question well into the future.