Imagine a movie so terrifying, so graphic and gory, that you spend half its running time peeking between your fingers.

Now, imagine a flick brimming with such powerful images of fantasy that it makes "Harry Potter" or "The Chronicles of Narnia" look like "Alf" reruns. Combine the two, and you have a peek into the imaginative world of "Pan's Labyrinth."

Larger-than-life Mexican director Guillermo del Toro has spent the better part of the last decade establishing himself in America with a mix of studio work ("Hellboy," "Blade II") and critically acclaimed foreign films ("Cronos," "The Devil's Backbone"), each branded with a signature mastery of darkness and dreamscapes. Now, months before his horrifically fantastical "Labyrinth" opens, sneak previews already have Hollywood insiders affixing the words "Best Picture contender" in front of it.

With nine weeks to go, the friendliest, most terrifying director in Hollywood broke down a key "Labyrinth" scene, gave us a peek at his oversized trick-or-treat costume and revealed that this Halloween has brought with it a particularly terrifying prospect: The purchase of his first tuxedo.

MTV: "Pan's Labyrinth" tells the story of a young girl escaping the horrors of war with frequent trips to a magical underground world. The above-the-ground scenes are as brutal as anything in "Hostel," and the magic stuff is like "Harry Potter" -- why don't more movies try to combine the two?

Guillermo del Toro: Well, I think that the entire literary genre of fairy tales is very much tapped into fear and terrible happenings. When you read the Brothers Grimm tales, you realize they are taking place in a time of famine and pestilence, and they deal with cannibalism, incest -- all sorts of nice stuff! It's funny that we've grown afraid of bringing that darkness into the magical elements when we address fairy tales.

MTV: The "Harry Potter" movies will tease audiences with potential threats, but Harry and his friends usually seem to be facing adventure, rather than real danger.

Del Toro: I remember reading the "Harry Potter" books before they made the movies, and I remember admiring the books very much, because I felt they were darker and far more heart-wrenching. The kid is an orphan, and there's almost a Dickensian thing there. All that got lost in the first two films; the darkness and emotion came back much stronger in Alfonso [Cuarón's] third film.

MTV: Will we ever see a trend of fantasy movies that aren't afraid to kill off people and show some real-life horror?

Del Toro: Yeah, I think there are shades of darkness in "Monster House" that are interesting and hopeful for me, because fantasy cannot be monochrome; fantasy cannot be all white. We're living in a time that is so hypocritical, that things [like "Monster House"] look daring. The classic Disney films look daring now! I don't think that today's studios would have the balls to kill Bambi's mother -- they would test it and f--- it up. And they wouldn't have the drunken nightmare in "Dumbo," or the Night on Bald Mountain sequence in "Fantasia" or so many other things. It's very scary when Disney starts becoming daring in this kind of perspective.

MTV: There's some stuff in "Pan's Labyrinth" that will haunt your nightmares for weeks. Do you consider it to be a horror film?

Del Toro: I consider it to be a fantasy film, but I have had the great honor to sit next to Stephen King during the Pale Man sequence and to see him squirm like crazy. That sequence is pretty close to horror, but the rest of the film is dark fantasy.

MTV: The Pale Man is the name you gave to the tall, creepy guy who the young girl finds sitting at the end of a table, with his eyeballs lying on a plate in front of him (click here to watch the terrifying sequence). When he realizes she's robbing him, he places the eyeballs in his hands and starts chasing her down. So what screwed-up part of your mind comes up with stuff like that?

Del Toro: [He laughs.] I wanted a monster that could come out of a child's imagination. Something that was simple in terms of the silhouette of it, but that was also scary as f---. Originally, I had thought of making him just an old guy, like a blind old guy, and somebody sculpted the face with a lot of detail then I doodled a new face on top of it without any features. I remembered how disturbing it was for me when I was a kid to see the "faces" on the bottom of manta rays, so I thought, "Well, that kind of neutrality, and that little mouth and those two little nostrils/eyes."

MTV: Viewers might identify with the little girl, Ofelia (Ivana Baquero), when she's trying to pull herself away from the Pale Man's grasp.

Del Toro: Well, empathy is a big deal in horror. When violence and horror are done without the empathy of the audience, it becomes almost like porn. Empathy is what makes it human and emotional.

MTV: So, what's the secret to scaring people?

Del Toro: Horror comes out of very simple devices, but you can sum them up in simple terms: Things that are there should not be there and could not be there, and yet they are. That's how you summarize it. It's what could not happen, what should not happen, but nevertheless happens. That's the world of horror.

MTV: Give us your five favorite scary movies, to help get us in the mood for Halloween.

Del Toro: First, I'd say "Eyes Without a Face" [1960] because it's poetic and haunting and strangely moving. Then "The 7th Victim" [1943], because it's moody, subtle and creepy. Next, I'd say "The Shining" [1980], because it's totally a milestone in horror filmmaking and remains one of the most disturbing movies I have ever seen. Number four would be "Don't Look Now" [1973], which contains some of the creepiest, but most strangely moving sequences in the history of film. And finally, I'd say "Black Sunday" [1977], because of how mysterious and rich and eerie it is.

MTV: Your studio has taken the unusual step of screening "Pan's Labyrinth" for critics months before its release date. Is it basically an attempt to get the word out?

Del Toro: We've been traveling with the movie festivals, and the reaction has been absolutely astounding all the way through. It all started out at the Cannes Festival, with a 22-minute standing ovation, which was life-changing. We've been showing it to very emotional, and very warm responses at the Toronto and New York film festivals, and it's my hope that the movie continues finding its audience. The secret to this movie is letting people see it.

MTV: And, of course, there's all the Oscar buzz that's beginning to swirl around the flick. Are you ready for all the madness of awards season?

Del Toro: [He laughs.] Thank you. Shout that from the rooftops, man! Seriously, I must confess, for the first time in my life I am considering buying a tuxedo.

MTV: What does a master of horror do for Halloween?

Del Toro: Normally, if I'm doing the costume thing, I'm a stickler -- I actually go to one of my pro friends and have them make me up. But this year, I'm giving in and I'm just going to go as a pirate. I'm gonna do myself up, man. I want to take the home-cooking approach to making the costume. I'm going to kick back, and I'm going to wear a pirate costume around the neighborhood.

MTV: Well, pirates are pretty big right now.

Del Toro: [He laughs.] Yeah, and when they see me, they are going to become even bigger -- like, as in size triple XL.

MTV: Maybe next year, the Pale Man will be the hot costume.

Del Toro: I would love nothing more.

Check out everything we've got on "Pan's Labyrinth."

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