The Dark Land by Michael Marshall Smith
Back in 1991 Nicholas Royle edited what was, to me, a revelatory little anthology of stories called Darklands. The book featured contributions by writers like Joel Lane, Stephen Gallagher and Mark Morris, and it was tailed-off with a story that has come to represent to me the very essence of what good horror fiction can do.
Michael Marshall Smith apparently based the story on a dream he had. That makes sense, because it's the most perfect rendering of dream logic I've ever encountered in a work of fiction (rivalling both the opening dream sequence in Bergman's Wild Strawberries and the whole of his Hour of the Wolf in its simple, matter-of-fact intensity).
The story begins in a deceptively normal manner, with a man looking through his window and seeing some kids, two men and a bicycle on his driveway. From there it descends into a work of paranoia and madness that literally left me shaking when I first read it. The protagonist enters (or was he already there?) a world that is both surreal and terrifyingly familiar, and it all ends with one of the best, and most chilling, lines in genre fiction.
To say anything more about the narrative would spoil the effect of a wonderful piece of work. If you haven't read this one, please seek it out. It's one of those stories that helped shape me as a writer - and the contributors of Darklands and its equally brilliant follow-up volume Darklands 2 are probably most responsible for me realising that the stuff I was trying to write was legitimate, that it was worth doing. For that - and for Nicholas Royle's vision - I shall always be grateful.