This chapter deals with one of the more controversial contributors to recent debates in film studies: Slavoj Žižek. His reconceptualization of Lacanain psychoanalytic theory around the category of the real has steered psychoanalytic film theory in new and interesting directions. He declares that they are shaped by the ideals people posit in the real, but in so far as that is the case, their experiences of reality are always shaped by ideological fantasy. This, ultimately, is Žižek's most fundamental breakthrough: that ideological fantasy is a good thing, not something that should be eschewed or dispensed with. In other words, ideological fantasies are not illusions. Rather, it is only by way of ideological fantasy that people can come to experience reality itself in the first place. Žižek's conclusion is that ideological fantasy effectively makes the world in which people live: ideological fantasy is at the foundation of what we call ‘reality’.