 The film version of "The Wizard of Oz" does the same thing by making its inner story into a dream.Lewis Carroll's celebrated "Alice" books use the same device of a dream as an excuse for fantasy, while Carroll's less well-known "Sylvie and Bruno" subverts the trope by allowing the dream figures to enter and interact with the "real" world.Some stories feature what might be called a literary version of the Droste effect, where an image contains a smaller version of itself (also a common feature in many fractals).