The Orphanage, which is Spain's official submission in the best-foreign-language-film category for this year's Oscars, is the story of Laura (the amazing Belén Rueda), a thirtysomething woman who, along with her husband Carlos (Fernando Cayo) and her young son Simón (Roger Príncep), moves into the orphanage in which she was raised. Administrating an orphanage is challenging enough for a family without the very real possibility of ghosts walking the hallways.

Like Devil's Backbone, The Others and Pan's Labyrinth, The Orphanage has an aesthetic that owes less to post-The Sixth Sense ghost movies than it does to the art films made in Spain under the fascist Franco regime, when directors like Carlos Saura (The Hunt and Cría Cuervos) and Víctor Erice (The Spirit of the Beehive) made haunting films that had to be deftly coded with hidden meanings to get past Franco's censors.

SCI FI Weekly talked to Bayona and Sánchez one cats-and-dogs rainy afternoon in Boston.By my math, the year that Laura, your protagonist in The Orphanage, is adopted as a child is the year that Franco died. Is this a coincidence?

Sánchez: Why do think that? [Laughs.] Absolutely, it's there for a reason. It's just one of many things buried in there in the film for whoever wants to pick it up. There's also [the subplot] about all the kids who disappear from the [orphanage]. It's one of the things that got cut from the film, the explanation of what happened to all those children [when they went missing just as the Franco regime was ending], because [director Bayona] really wanted to focus on the character of Laura and what happened to her, and he thought it was not really necessary to explain what had happened to the children. But yes, it's one of the things that survived, that she was adopted when Franco died.

Bayona: It's interesting because it's one the things that made the movie only work in a Spanish environment. For example, the disappearance of the children in the past. We were talking to an association of fathers of children who disappeared. And it was very impressive, because this was one of the oldest associations in Spain, and they were only just 10 years old. And there was nothing about that [the disappearance of children] just 10 years ago. And if that [the formation of the association] happened 10 years ago in Spain, you can imagine what happened in the time of Franco. And there were a lot of things [in The Orphanage] that try to go back to that moment. For example, the casting of Geraldine Chaplin [Carlos Saura's collaborator and the star for films like 1976's Cría Cuervos] was kind of a tribute to the movies of the 1970s, the Carlos Saura movies [made while Franco was in power]. There are shots in the movie that are inspired by the way that Víctor Erice shot The Spirit of the Beehive. The first shot, for example, is like a drawing [made by] a kid, the lining up of the flowers and the tree and the house and how the kids appear from the left side [of the shot] is like the drawing of a child, and it reminds me of how Víctor Erice shot The Spirit of the Beehive.

Sánchez: And also if you do the math ... she [Laura] was born in 1968, which has some political connotations, and it's also the biggest year for sci-fi and fantasy films ever, for me. That year was amazing! So, that was a bit of a geek thing. ...The Others, Pan's Labyrinth, The Devil's Backbone all directly or indirectly deal with fascism. They're coded films, like those of Saura and Erice. Did you go in meaning to code a film with many layers in this same way?

Bayona: We were not thinking of fascism. I was working more with the idea of childhood. And I used my own childhood. I try to deal with responsibility, with the idea of separation, with these kinds of things that most of us are afraid of. I don't know if we were thinking about fascism.

Sánchez: No, but I thought it just added interesting things to the story, to know where she [Laura] came from and why six children can just go missing so easily [30 years ago, under Franco] and no one would care. Speaking of childhood and memories ... Geraldine Chaplin, one of the stars of The Orphanage, in Saura's Cría Cuervos, played a memory [she was the phantom-like memory of the dead mother of a little girl played by Spirit of the Beehive star Ana Torrent]. Are ghosts inherently memories?

Bayona: That's an interesting question. It is obvious to me that ghosts are the memory of something. That's one of the reasons I came back to Geraldine Chaplin. One of the memories I've got from when I was a child growing up watching Carlos Saura's movies, and the Victor Erice movie Spirit of the Beehive. For me, these movies really work like scary movies [Beehive deals with a little girl during the Spanish Civil War who believes Frankenstein's monster lives in the hills near her home]. Because they have a very, very weird atmosphere. And the mood was very strange for me. So I was scared of these movies when I was a child. I watched them again when I was an adult and discovered completely different movies. And while trying to cast the character of [The Orphanage's psychic] Aurora, I remembered Geraldine Chaplin. I was trying to go back [to those 1970s movies]. And The Orphanage deals with the idea of going back, in relation to the character of Laura. And I wanted The Orphange to be a regression to the movies I saw as a child.So cinema and ghosts are both memories?

Bayona: Yes, of course! And it's interesting, the whole idea of the memory is based on psychological roots; if you talk about Pan's Labyrinth or The Devil's Backbone, they all share the psychological reason for the ghosts. Which is not the case with The Others, which is more like an English genre mystery, or Agatha Christie. It deals more with a twist in the plot, and then you discover what happened. It's doesn't have the psychological roots that we were working on. We were always starting [from the idea as to why] Laura goes back to the [orphanage] where she happily grew up. And then everything [made] sense. It's like the idea of childhood in the movie is a very, very happy childhood. It's almost bucolic. It's not, probably, what was real. It's the memories that we got from childhood. And for me, that was very important, to keep that kind of happiness, because she is dealing with the idea of the pursuit of happiness. And that's why the movie ends with this feeling of fantasy. What is she looking for throughout the whole story?Aside from the reference to the year Franco died and the year of Laura's birth being 1968, what are some of the other things you have coded into the movie?

Sánchez: Well, it's just here and there, but basically, I just focused mainly on children's tales and folk stories and mythology, things like that. What Laura does in this film is create a fiction out of elements in reality, so I thought it would be interesting just to put things here and there, like the shells that [her son Simón leaves as a trail for his imaginary friend Tomás to follow] drops on the beach and that appear on the doorstep of the [orphanage]. It's like Hansel and Gretel leaving breadcrumbs to find their way back home. There's open references to Peter Pan and Turn of the Screw. And also the character of the parapsychologist talks about the concept of doppelgangers and the Spanish equivalents of those things. And we just wanted to stock the film with references and all these folk and mythological figures. So that Laura creates her own myths from a childhood she believes was happy, but that had nothing to do with happiness. ... This is a movie without a real villain; the bad guy is memory itself. It's your own memories and your own fears and how you cope with them. And you can either take them to a healthy place or you can go to the dark corners. And that's what happens to Laura.

Bayona: If you look at the ending of this movie, there were all these people [during production] telling us that there were two endings to the movie. And this is a movie that deals with two readings of the same story. It's like a ghost story, and at the same story it's a real story about a woman who is dealing with a pathology, a loss. So, for us, to take out one of the endings was to tell the audience what to think about it, what was our reading. So what we decided was to put another sequence at the end, so you can see an open door that opens, that is an invitation for the audience to participate in the story.How did Guillermo del Toro get involved in this project? Did you bring it to him? Is he not filming 3993, a sequel to [Sánchez's horror movie about the Spanish Civil War] 7337 [from a script by Sánchez]?

Sánchez: Once he's done with Hellboy 2 he might shoot this one. I'm writing a project that's a fantasy film that deals with the Spanish Civil War, but it's not a sequel [to 3993], per se. It's closer to Pan's Labyrinth and The Devil's Backbone. He might be doing that. That [project] came as a result of him knowing me. I've known Guillermo for years. ...So Guillermo del Toro had read the script [to The Orphanage], and ...?

Bayona: Yeah, I met Guillermo a long time ago, like, 15 years ago he was in Spain presenting Cronos. I remember I was a minor when I met him. I was working for a local TV station in Spain, pretending to be a journalist so I could get free tickets to a film festival. ...Like Tintin?

Bayona: Yeah! I did it in order to get free tickets to the screenings and to interview a lot of people I really admired, and Guillermo was presenting Cronos when I interviewed him. He was very impressed by the way I looked, because he told me later that I looked like a 10-year-old boy with sideburns. He was also very impressed by my questions. I can't remember what the questions were, but he was very impressed. And we kept in touch since then. He came to Spain a couple of times; he showed The Devil's Backbone and Pan's Labyrinth. I was shooting a lot of stuff before The Orphanage, like short films, commercials and music videos, and he was very impressed by them. So when I told him about The Orphanage, he decided to be involved. He decided to produce the movie. And when you think about Guillermo, Pedro Almodóvar [Oscar-winning director of Volver, Bad Education, etc.] was the producer of The Devil's Backbone, so he was very sensitive of a director producing another director.

He got an excellent experience with Almodóvar. He always came to me and repeated that Almodóvar told him once that "a good producer is never there when you don't need him, and he's always there when you do need him." And he wanted to the same. He just created a space of freedom of creativity. Like if we talked about the budget, if we had to talk about the ideas, he never gave us an idea more than once. He never insisted in giving us an idea more than once. And he understood perfectly that this was our movie, and he was very happy with that. I remember when I saw for the first time Pan's Labyrinth. I didn't know anything about Pan's Labyrinth; we were working on The Orphanage. And when I discovered the movie, it was a happy surprise because I understood how he was so happy with our material. Because there are a lot of things in common [between The Orphanage and Pan's]. The idea of how we need fantasy to face reality is the same theme in The Orphanage and Pan's Labyrinth.Speaking of needing fantasy to deal with reality and keeping with the ideas presented by Erice and Saura, why does this have to be done through the lens of childhood?

Bayona: Well, if you think of fairy tales—a child can't understand how the world is, they need fairy tales to understand how it works. In fairy tales, when you talk about adults, there are a lot of times that you talk about giants. Children can't understand that adults can be evil persons, but they can understand how giants could be evil characters. So you use fantasy to let them know how the world works. And that's exactly what the character of Laura is doing [in The Orphanage]. There is a moment when she needs fantasy to understand how the world is working, because the world is leading her in so extreme a situation of desperation that she needs fantasy to let her hold on to something. And that's similar to Cría Cuervos; the little girl is talking to her [dead] mother. What filmed ghosts do you admire, and how did you bring that admiration to The Orphanage?

Sánchez: Actually, when I think of ghost films that I enjoyed, it's a very small list. Jack Clayton's The Innocents [based on Turn of the Screw] I think is wonderful. Poltergeist is fun, but it's a different kind of film. I don't know. ... I can't think of ghosts in movies that really stuck in my imagination, other than Quint [the possibly dead valet] in The Innocents. I mostly remember ghosts that aren't really perceived as ghosts, or something more subtle, something like, for example, the character of Geraldine Chaplin in Cría Cuervos. That, for me, really stuck in there.

Bayona: I like the idea of being able to try to identify what a ghost is. There's a wider body of ghost literature in the American tradition, which there is not in Spanish literature. There really isn't a history. You have to go back to the stories of Francoism to get a resource of where to pick up ghost stories. There's an oral tradition of ghost stories in Spain. You can't go back to any kind of literature, but you have to go back to the Franco regime. It's interesting how the American tradition is more about having fun with the ghosts. There's the celebration of the phenomenon of ghosts. There's the European tradition where you try to find out what the ghost is all about. Just like the idea of childhood. In American films, childhood is more celebrated, while in European films, it's like trying to deal with and resolve your own childhood. [Now speaking directly, without the interpreter:] There is a part in The Orphanage between the world of fantasy and the world of ghosts and the world of children. Even the character of Laura—look at how [toward the end of the movie] she is wearing the same clothes as the children are wearing at the beginning of the movie. It's like going back to that moment and trying to solve that situation [created by the ghosts]. I think the movie deals with both ideas at the same time. There is a celebration of the ghost story, a lot of scary sequences that the audiences will really enjoy. But at the same time, there is a deep feeling of trying to solve your own childhood.

Sánchez: It's funny that we've been talking about ghosts, because all this time there's the question that's repeated throughout The Orphanage and that begins The Devil's Backbone: "What is a ghost?" A ghost these days is a movie—it's exactly that. It's something that's just there for a while. It's not tangible. But it makes an impact on you.