Producer Lawrence Grey loves horror movies. But he still shivers, remembering a 2 1/2 minute video that starts on a rainy Scandinavian night. A ordinary woman is getting ready for bed in her small apartment. She switches off the hall light and, in the darkness at the other end of the hall, she sees a shadow. A silhouette. Something almost human. But not quite.

"She turns the lights back on, silhouette's gone," Grey recalls. "Turns lights off again, silhouette reappears."

A nifty visual that gets really creepy, really quickly. It plays on those moments of not quite trusting one's perceptions, of glimpsing something in the dark or from the corner of the eye and not being certain if it's real.

David Sandberg directed that short movie, Lights Out. At the time he was a haphazardly employed freelance filmmaker in Gothenburg, Sweden. "It cost zero dollars," he happily confided from his current perch at the Warner Brothers set in Burbank, Calif. Working with Grey, he adapted Lights Out into a $5 million horror feature now poised to be one of this summer's sleeper hits. And in a bit of Hollywood Cinderella-ism, Sandberg directed the feature as well.

That's rare in Hollywood, especially for a filmmaker who's entirely self-taught. Sandberg learned about filmmaking partly from YouTube tutorials. His wife, Lotta Losten, helped support him by working at a group home for adults with mental illness. The couple amused themselves by making short horror movies at home. She starred, he shot.

"And we used IKEA lights and like, I built a dolly myself, and we shot [Lights Out] in an evening after Lotta got off work," Sandberg recalls.

They entered Lights Out in a contest sponsored by the horror site Bloody Disgusting. It did not win. But the video found fans among Hollywood agents, producers and managers. Sandberg's phone began to ring.

"I had to make, like, a spreadsheet with everyone I'd talked to and what was said last just to keep track of it all," Sandberg says. He chose producer Lawrence Grey, who connected the newbie director with one of the most powerful figures in Hollywood: James Wan. Wan's cheapie 2004 horror movie Saw spawned a six-part franchise that's earned nearly $500 million. Now Wan's synonymous with such low-budget, highly lucrative horror series as Insidious and The Conjuring.

Wan co-produced Lights Out— especially helpful, given that Sandberg had no idea how to direct an actual movie. He didn't know when to say "action," let alone how to work with a crew. To trust a filmmaker so lacking in fundamentals might sound imprudent, but Grey said he trusted Sandberg's vision. He added that, when it comes to low budget horror, financiers can afford to take risks.

"They know they can take the movie to video with the players involved and make a small profit," he said, outlining a worse-case scenario.

Grey admitted to another challenge when it came to adapting a full-fledged feature from a 2 1/2 minute short: "There is no story."

The upside, he said, was getting to build a narrative from scratch, and use the opportunity to subvert horror tropes and clichés. Partly for budgetary reasons, Lights Out turned into an intimate family drama, where a mother, not a child, is haunted by an imaginary friend.

"How do you make that believable?" Grey wondered rhetorically. The answer was by creating a believable history of addiction and mental illness, layering realistic sadness and stress on the family's relationships. Of course, Lights Out is an escapist thriller, but the emotional poignancy and heart resonated with an audience that screamed and shook through an early screening a few weeks ago at VidCon in Anaheim, Calif.

"It was fantastic," said audience member Angela Garner as the credits rolled. "I haven't seen a scary movie like that in a while and it was perfect. I'd been looking for something like that. It had the perfect amount of jump scares in the right moments. It was awesome."

Critics who, at the time of this writing, have given Lights Outsstrongly positive reviews on Rotten Tomatoes, say there's a good chance Lights Out will also goose the late summer box office.

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