Hi Jim,
A little more character development seems in order. Even if it is just through a narrated voiceover at the begining. For example, who are the three characters other than the old man and alien? Maybe you established the characters in the first part??
I found it a little hard to hear what the characters were saying. Assuming you don't want to dub in the sound after the fact perhaps you may want to have your actors closer together which will allow you to get the camera a little closer to them, and perhaps keep the action during speaking parts a little more subtle (more like the start of part 3 on the bed). Perhaps you may want to turn down or pause Carl Orff during the speaking parts.
Found the dream bubble and the other special effects pretty cool.
Regards,
John