The Company of Wolves (1984)

Image copyright ITC Entertainment

The first thing that you notice when you watch this film is the strangely ambigous setting.  From a contemporary opening, the story appears to enter the dreams of a teenage girl, Rosaleen (Sarah Patterson), which take the form of a medieval village in the depths of a deep dark wood inhabited by wolves.  However, the wolves in question supposedly come in two forms, described as "hairy on the outside" or the considerably more dangerous "hairy on the inside".
A key aspect of the film is the technique of telling stories in the form of dramatised scenes interspersed with the "real world" as it were.  It is in the first one of these stories that we first see that the "hairy on the inside" wolves are in fact werewolves, via a particularly gruesome transformation sequence.

Image copyright ITC Entertainment

The character of Rosaleen's dreamworld grandmother (Angela Lansbury), is responsible for imparting the cautionary tales about wolves (of both kinds) to Rosaleen, under the guise of preparing her for adult life and the perils it holds.  Whilst on the surface this would appear to be a sensible precaution, particularly since Rosaleen's older sister has just been killed by wolves, the method of delivery emphasises what the New York Times film critic Vincent Canby described as her "eerily kind, actually menacing" character.  There is in fact some symbolism to suggest that the grandmother is in fact a witch, in the form of a (occasionally animate) stoat skin that she wears as a stole.
There is in fact a heavy vein of symbolism running throughout the entire film, from the werewolves (with their implication that men are predators out to "devour" adolescent girls) to the peculiar contents of the eggs in a birds nest (tiny stone statues of human babies, symbolising the onset of sexual maturity).  This is accented by the not-quite-real village and forest in which the film plays out, where boa constrictors can be found draped over tree branches, and toads sit in the snow by an abandoned stone well.  Indeed, Time Out's film critic Neil Jordan described it as a "Gothic landscape of the imagination...perfectly conveyed by film"
The overall tone of this film is far darker than the modern, "child-friendly" version of Little Red Riding Hood, and is closer to the original version of the story written down by the brothers Grimm.  There is no clear happy ending , merely an ambiguous scene that plays with our notions of reality and the dream world.  I feel that the film critic, Robert Ebert, sums up the film perfectly when he says "The movie has an uncanny, hypnotic force; we always know what is happening, but we rarely know why, or how it connects with anything else, or how we can escape from it, or why it seems to correspond so deeply with our guilts and fears.  That is, of course, almost a definition of a nightmare".