"Portugal, in February 1981." A Young German film director, Fritz, and his team from Hollywood are working on a science fiction film, a remake of Allan Dwan's' 'The Most Dangerous Man".

For a set, they use a hotel that has been seriously damaged by a gale, and they themselves live in the intact part of the building.

After two weeks of shooting, the money and the film stock runs out, and now they are waiting for Gordon, the Producer, to come back from Hollywood with more material and funds. When he fails to turn up, Fritz decides to fly to Hollywood himself.

Wim Wenders said that he had the idea to make this film for a long time, and that it is not based on the experiences he had while filming "Hammett'. However, even so, The State of Things is a very personal film about the general hazards and the anguish of film making. It reflects a European film maker's view of Hollywood.