Toby Grisoni (Adam Driver), a director of an advertising company, strives to produce an ad that features the characters Don Quixote and Sancho Panza in rural Spain. Being at a restaurant after a day of unsuccessful shooting, Toby’s superior (Stellan Skarsgård) advises him to find inspiration and brings him a Gypsy (Óscar Jaenada) who sells him an old DVD on which a white film is black man named The Man Who Killed Don Quixote.
Coincidence makes Toby write this movie ten years ago when he was a student. Being nostalgic, Toby watches the film and is so captivated that he barely notices the seductive attempts of Chief’s wife, Jacqui (Olga Kurylenko). When the Chief returns, Toby runs panicked and takes the DVD with him. Past images feature film production from Toby’s student when he selects old shoemaker Javier (Jonathan Pryce) for Don Quixote’s role and falls in love with a teenage waitress named Angelica (Joana Ribeiro).
Javier is very restrained in accepting the role because he does not have an actor experience and proves incapable of following Toby’s instructions. However, when Angelica is the victim of a Toby team’s prank, he begins to enjoy his role very much. Nowadays, Toby realizes that the location where he shot The Man Who Killed Don Quixote is not far from where he is currently filming and after a tense conversation with the Head about the night before, Toby goes motorcycle to Los Sueños .