What was this animated film?

I remembered a movie back on Cartoon Network's Cartoon Theatre that had this black and white or minimal color animation done over live action black and white photos, sometimes involving clip art-like animation. It has been a while since I've seen it, but I do remember it was about a man and a shape-shifting dog who investigate a mad scientist's plot to using some kind of nightmare machine. I think the movie may have been European/British/Canadian because it doesn't have any notability in the US, Cartoon Theatre's wikia doesn't even have it listed, but I have seen small clips of it on retro promos for Cartoon Theatre. I remember the title having the world nightmares in it. If anybody knows the title, let me know.