Pan's Labyrinth is the latest and perhaps best film yet from Mexican filmmaker Guillermo del Toro. The fantasy, sort of a dark spin on Alice in Wonderland, follows a young girl named Ofelia (Ivana Baquero) as she copes with life in the aftermath of the Spanish Civil War. She adores her mother (Ariadna Gil), but her stepfather is Capt. Vidal (Sergi Lopez), a merciless fascist who barely tolerates Ofelia's presence.

Ofelia clings to her fairy-tale books, and out just beyond the mill she calls home, in a garden labyrinth, she escapes into a fantasy world populated by a bizarre, order-giving creature called Faun (Doug Jones), and all sorts of creatures great and small, including a ghastly figure named the Pale Man (Jones), a massive frog, assorted fairies and the like.

Del Toro, whose credits include Cronos, The Devil's Backbone, Blade II and Hellboy, wrote and directed Pan's Labyrinth, which will open in limited release on Dec. 29. Baquero is a 12-year-old Spaniard who previously acted in such films as Romasanta, Rottweiler and Fragiles. Del Toro and Baquero recently spoke with reporters at a New York City hotelGuillermo del Toro, this is a fantasy film for adults, right? It's not intended for kids?

Del Toro: I think that if I was totally in charge of the entire parenting board, I would say up to a certain age I agree with you, but I think that there is a very perverse exercise in raising kids, in which we on the one hand isolate them from violence that has any real weight, and allow them to immerse themselves in violence that has no reality to it. You know? On the one hand, you create children that are hypersensitive to adversity and pain, and you create children that are perversely addicted to the graphic nature of violence, so it's ... I would say that up to a certain point I would allow younger kids than the rating it has to see it in their teens, early teens. But thank God I am not in charge of the parenting board. [laughs] The film is set in 1944 and deals the [Batista] regime and Spanish Civil War, yet it's steeped in fantasy. What makes you equate the two, whether it's this film or The Devil's Backbone?

Del Toro: Because I believe in parables more than I believe in political speech. And I think that parables have the chance to move you spiritually or emotionally and affect you emotionally. And political speech, if you don't agree with it, it just makes a little static on your brain. It's argumentative. It's not emotional. I think The Devil's Backbone was trying to say that anything pending, including the civil war, which has never completely healed in Spain, is a ghost, anything pending is a ghost. And what better way to say that than with what the movie says, "What is a ghost?" Is it something that seems alive, or a tragedy doomed to repeat itself over and over again, like the war, and so forth. And Pan's Labyrinth, when I go through the years of collecting fairy tales in their original form and original publication, I realized one of the themes that repeated itself over and over and over again was the theme of choice. Choice as a way of defining your destiny. And I thought this is a way to illuminate it. The difference is parable over more of a pamphlet political. Parable does not need to affect a particular outcome of an election or a vote or things like that. Parable discusses general issues. The Faun is a truly complex character, because it's horrifying, yet appears to have a caring, paternal aspect. Walk us through the genesis of the character and how you created its look.

Del Toro: The character, in terms of the look, I always start with my little diary and I start coding the movie in terms of appearance and colors and so forth. So I start my notes for the screenplay really, before I shoot anything, and I start designing stuff for it. And I made a note about the faun, which is the faun I used to see as a kid, I said, but I never saw his legs, I always saw only the tip of the leg and I started screaming. And I like an illustrator, Arthur Rackham, along with Kay Nielsen and Edmond Dulac. [They] are like the Holy Trinity of child's illustration. And I like the knotty, twisted nature of his trees and the roots, and I thought it would be great to have the fairies be like little cannibalistic monkeys that eat meat, and the faun be a really raggedy guy who has been there for 300 years waiting for the goddamn princess to show up, and be like "Finally, you're here, let's get going."

And the character of the faun is essentially the trickster. He is a character that is neither good nor bad. He's a character ... that's why I chose a faun. Not "Pan." Pan is just the translation, which is not accurate. It's a faun, because the faun in classical mythology was at the same time a creature of destruction, and a creature of nurturing and life. So he can as easily destroy her as he can help her. And he's always ambiguous, you will notice if you ever see the movie again, the faun starts really old and blind and creepy, and she doesn't trust him then, and as the movie progresses he becomes rejuvenated and beautiful and at the end he is really young and his eyes are full, and he's clean, and still she doesn't trust him. And I think it's important for her to make mistakes by her disobedience, but not give up. According to my reading of the movie, OK, and this does not mean "Oh I got it," the faun is a parent, and the faun is a fraud. She is really put to test, but he is playing those roles.Do you remember your dreams?

Del Toro: Yeah, I dream very ... the only dreams I have are very pedestrian. I dream mostly that I am eaten by sharks and zombies. Really.Why not get sharks and zombies together?

Del Toro: Lucio Fulci did it.What are you working on now?

Del Toro: We're gonna do Hellboy II, man, The Golden Army. Going back to comic books. And the theme is similar to Pan's Labyrinth: Every day is grinding fantasy to dust. And then I hope to go back to Spain and do the third one of these.Ivana Baquero, you cry in this movie a lot. What makes you cry?

Baquero: Well, I think that some of the point of being an actress is being able to use your feelings and to interpret them, and I think Guillermo did help me a lot to use my feelings, to be able to [use] my fears and my sadness. There's not a specific thing that made me cry, but the whole atmosphere that was surrounding Ofelia, the whole sad atmosphere, really helped me get into character and be able to shout or cry or be happy.But what actually made you cry in the moment?

Baquero: For example, let's say the moment where her mother dies, Guillermo told me, "Imagine how Ofelia felt when the only person she loved and the only person who loved her died. How would she feel? How bad would she feel? And how would she fear that moment?" So I really got into the character and I thought of all these sad events that were happening to Ofelia. So I was really sad and I did cry.Have your friends seen the film yet? What do they make of it? Of you being an actress in this movie that will be seen all around the world?

Baquero: Well, I don't tell them I do film. I don't go into school and say, "I just did a film and it's going to go in all the theaters in Spain and all the theaters in world," but they end up knowing because they see it on the TV and they see it in the theaters. For this movie, I wouldn't tell them to see it because it's kind of tough. But if their parents want them to see it, it's up to them. They can see it if they want to. But I do think all adults, even if you like thrillers or even if you like gothic or any kind of genre [films], they should see it, because it's a movie that makes you use all these feelings, such as sadness, to be scared, to be happy, even though it's not scary, the movie.You didn't think the movie is scary?

Baquero: I do think it's scary in some way. It is, but the movie is not [that] scary. The genre is not horror or anything, but it is scary. I think it's more fantastic and more talking about the tough civil war, the politics of it, and also the fantasy of a girl named Ofelia and the whole atmosphere of it.Did you read any fairytales in preparation or maybe when you were younger?

Baquero: When I was young, definitely, I did read lots of fairy tales, and I do still, but the school [now] tells me to read more about history and stuff. But I do read fairytales whenever I can. And especially when I was doing the filming Guillermo would send me lots of comics, because I love comics. And he sent me lots of fairytales, such as Peter Pan, Alice in the Wonder World. He sent me lots of them so that I could get more into the atmosphere of Ofelia and more into what she felt. These were in Spanish, and it definitely helped me a lot.Can you talk about working with Doug Jones? What was he like on set?

Baquero: Before every day of filming I talk with Jones about the scene we were going to do and we practiced it. Then I had to get used to working with a Pan, because out of four months of filming I filmed with him two months. So I really had to get used to seeing a two-meter man dressed in a Pan suit in front of me. He's a great actor, too, and when he was in the scene he acted scary. So he was definitely scary, but I wasn't scared because I had the crew surrounding me.How hard or easy was it acting with fairies that weren't there?

Baquero: It was hard and it was not hard. It was hard because they told me, "You have to imagine a fairy here, and then it goes there and then it goes there." So I had to imagine it. But then it was easy because Guillermo helped me a lot and the whole crew told me, "There's the fairy." And before filming they told me exactly where the fairy was. And I ended up loving it because I had to use my imagination.When you watch this film do you watch it as an audience member or do you relive making it? And if you're not totally reliving it, what do you get from it? What does it mean to you?

Baquero: I think I see it both [ways]. I think I see it as a normal person who first comes and sees the movie, and I also see it as, "Look, I've been through this sequence, and it was really, really tough doing it." So I do both. I've seen it so many times and every time I see a different thing. The first time I saw the movie really wondered how it looked, the movie, and if I did it good, so all the time I focused on me and on the other actors. But then, the second time, I was focused on the music. The third one on Sergi Lopez. Every time I see it I see different stuff.And what does the movie mean to you?

Baquero: I think it's marvelous. At the same time it can bring you pain and sadness and scariness and happiness. So you can experience lots of feelings at the same time.What is next for you?

Baquero: My biggest project at the moment is school, which is really important for me. Now I'm also concentrated on the promotion [of Pan's]. After New York, it's Mexico and Los Angeles, which is quite tough, and then I have to go back to school. But I really hope that this summer or even before I have another project going on.Any particular project you'd really love to do?

Baquero: I think throughout the years I've been acting I've seen lots of movies and I learned that with some movies I can learn a lot. Whenever I see a movie that inspires me I want to do it. So there's no specific movie I want to do, but at the same time I want to do every movie so that I can learn a lot.