As a genre, Horror has had its moments in the mainstream sun and stretched beyond the realms of cult cinema, but there are still films that serve almost as a membership test to true genre fandom, films that horror fans adore but that a mainstream audience just wouldn't know what to do with. Phantasm is most definitely one such work. On its initial release, the somewhat austere Films and Filming magazine really laid into it, the reviewer in question having only just recovered from David Lynch's Eraserhead (I loved that, too). As a review intended to dissuade readers from seeing the film, it may have worked for the Merchant-Ivory crowd, but for a hard-core horror fan, every point made against it worked more as a taster for what was sounding increasingly like a genre treat.

Oh yes.

The American independent horror film was never more vibrant than in the 1970s, a calling card for new directors able to fund projects on the promise of sensationalism and a guaranteed audience at the drive-ins. Denied the budgets of their big-budget contemporaries, the filmmakers got inventive with their storylines and even film techniques, and horror fans responded accordingly, turning a blind eye to dodgy special effects and iffy make-up to relish in the storytelling, characters and atmosphere. And, in certain, special cases, the strangeness.

Plot summaries of Phantasm, if they are to avoid giving away later twists, inevitably suggest a narrative that dances through peculiarity for the sake of it. Which may be no bad thing, of course, but always gives ammunition to the anti-horror crowd, and in this case would be misplaced. If you're new to the film, and you have to be either new to 1970s horror or very, very young to be so, then try this on for size:

20-something Jody and his young brother Mike live alone after the death of their parents two years earlier. When Jody's friend Tommy is killed while making out at a local cemetery, Jody and his good friend Reggie attend his funeral at the nearby Morningside Cemetery. Mike, who fears that Jody may be planning to move away and abandon him, follows him there and is spooked by strange noises and figures darting between the gravestones. He observes the funeral ceremony from a distance, but afterwards sees a tall and imposing funeral worker pick up Tommy's coffin and place it in the hearst as if it were made of paper. Twice more he is threatened by the mysterious creatures, and when Jody dismisses his claims he breaks into the funeral home and narrowly avoids being killed by a flying silver sphere that instead attacks an unfortunate caretaker, drilling a hole in his head and rapidly draining him of blood. Shortly afterwards Mike is spotted and chased by the Tall Man, whose fingers become trapped when Mike slams a door on them. He cuts them off with a knife he has brought for his defence, but they continue to move independently after the fall. Mike grabs one and shows it to Jody as evidence of his misadventures, but it transforms into a vicious, flying bug that attacks the two brothers and the visiting Reggie, until they grab it and stuff it down the garbage disposal. Shall I go on?

Initially the film certainly trades on its strangeness, but uses it from the start to create a genuinely unsettling atmosphere of other-worldly menace. The interior of the funeral home in particular, with its white marbled corridors and distant electronic hum, is as creepy as the darkest of gothic castles and host to its very own flying mechanical vampire, as iconic a creation as anything in modern horror cinema. Actually, Phantasm manages that rare trick of creating a second horror icon in one film in the shape of The Tall Man, a role that made actor Angus Scrimm a fan favourite, despite a performance that leans to towards ham. It is he, though, that provides one of its most memorable moments of peculiarity, as the film speed slows to emphasise his long-leg stride and the natural sound drops until only the clomp of his footsteps can be heard. Then, unexpectedly, he stops, turning as if he has sensed something, only to react either with pain or orgasmic pleasure (you decide) at the cold air emanating from Reggie's ice-cream truck.

Oh wait a minute, there's horror icon number three: Reggie Banister. It's hard to pin down exactly what has made Reggie so popular with the film's fans, but we love him nonetheless. Reggie's the sort of reluctant hero those of us who've left their twenties behind want in our horror films. Balding, pony-tailed and only a tad past his prime, he's a musician at heart but has ended up in a workaday job and is just not ready for what happens to him and his friends, surviving on luck and wits and a completely unforced, post-hippy cool. For us, Reggie's the man.

And so back to the plot. Did I mention the hooded dwarfs, who aren't dwarfs at all but regular people crushed down to half their size? That they look like the sand people in Star Wars is unfortunate but coincidental – Coscarelli got started on Phantasm (at the tender age of 23) before even the trailers for Lucas's film hit the streets. But they fit in here perfectly. Surrealistic strangeness runs throughout Phantasm's entire, joyous length, but the film's unexpected trump card is that before we reach the end, much of this peculiarity will actually make sense, explained in an imaginative and very well executed plot reveal. The film scores repeatedly on originality of ideas and obvious antecedents are hard to spot, though there are a couple of unexpected influences, with the design of a key set inspired by Kubrick's 2001 and Mike's hand-in-a-box trial of faith borrowed from Frank Herbert's Dune, a scene that was to reappear later in David Lynch's film adaptation.

If some of the special effects are a little ropey (the finger bug is a comically cheap creation), others work rather well, the flying sphere presented as a most convincing and dangerous threat, coming across almost as a bloodthirsty cruise missile. Similarly the acting is a little variable, Bill Thornbury feeling a tad wooden at times as Jody, but balanced well by some impressive work by young Michael Baldwin as Mike, whose wide-eyed fear and determination are always convincing.

But in the end it's Coscarelli's show. As writer, director, cameraman and editor, he is very much the auteur here, and deserves the praise for creating such an atmospheric, inventive and enormously enjoyable cult favourite that has stood the test of time very nicely. It's almost a shame that the success of Phantasm resulted in him spending much of the next twenty years pumping out sequels instead of moving on to pastures new, but he has since made good on this initial promise with the hugely enjoyable Bubba Ho-Tep. That he is set to make a follow-up to that movie hints that Coscarelli's own history may be about to repeat itself.

If the extra features have been recycled from elsewhere (see below), then it's the picture and sound that provide the principal reason for upgrading to this new edition. The picture on the old MGM region 1 release was sound enough but non anamorphic, and Anchor Bay have not just delivered an anamorphic transfer, but an damned good one – this is certainly the best I have ever seen Phantasm look on DVD, with sharpness, colour and especially contrast very impressive. Black levels are superb, and given the number of scenes set at night, this is crucial. There is still some dust and minor print damage on show, but it does not distract.

Upgrade number 2 involves the soundtrack. There are three on offer, the original mono 2.0, a 5.1 remix and DTS, which is essentially the 5.1 with a tad more wallop. It's good to have the original track, but the remix really adds to the atmosphere, spreading the sound out and adding clarity and range. The real ear-opener is the White Room, which always had some serious bass but on the DTS remix threw so much deep vibration around my living room I thought my ears were going to bleed.

It should be noted that this is at least the third outing for the extra features included here. Created first for the film's original laserdisc release, they were recycled for MGM's region 1 disc a few years back and have turned up again unmolested here. If you already have any of the previous incarnations, as I have, this is a tad disappointing, but on the up side they are rather good and if you don't have them already you'll be happy enough.

A Commentary from director Coscarelli and actors Michael Baldwin, Bill Thornbury and Angus Scrimm provides a nice mixture of insight and personal reminiscences. Sound quality is slightly below par, with a noticeable hiss hovering in the background, except on most of Angus Scrimm's contributions, which, although directly responded to by the others, almost sound re-recorded.

The Introduction by Angus Scrimm (2:17) directly preceded the film on the previous DVD release, but I do prefer it as a separate extra (when I start a film I want to get straight to it). It's a 4:3 video address to camera, rather basically lit and has a little touch of Criswell about it, but will amuse the fans nonetheless.

The Deleted Scenes (9:59) are presented as a mixture of non-anamorphic 1.85:1 and 4:3, with either unmixed and non-existent sound. A combination of slightly wobbly character scenes and more intriguing plot-driven sequences, they include an alternate climax involving an exploding Tall Man, and the excellent line, "You think you go to heaven? You go to US!" which was recycled to slightly less effect in Phantasm II.

The Original Theatrical Trailer (2:10) is non-anamorphic 1.85:1 and in OK if not sparkling shape (especially the audio). It includes a little too much of the later scenes for newcomers.

Behind the Scenes Footage (19:59) is 4:3 super-8 footage of the shoot, with a commentary by Coscarelli and, making up for his absence on the main commentary somewhat, Reggie Bannister (rah!). The transfer to video, or perhaps from NTSC, has caused some minor wobbles in places, but the footage itself is super-8 and thus hardly in pristine condition anyway. It matters not, this is invaluable stuff for fans of the film, showing how scenes were filmed and including a few nice off-the-cuff moments (Angus Scrimm standing motionless under an umbrella waiting for his cue I particularly liked).

Finally there are Biographies for Coscarelli, Reggie Bannister, Bill Thornbury, Angus Scrimm, Michael Baldwin and Fred Myrow.

OK, the extras are recycled, but the picture and sound are very good and this alone may prove worth the buy for the film's fans. Of course, if you're a real devotee you'll go for the 5-disc sphere box set, which has the coolest packaging I've seen, well, ever, and includes a bonus disc that will be reviewed separately, as will the other three films in the series. If you're new to the film then whether it starts your motor will depend on your credentials as a horror fan, but for those us with 'hardcore' stamped on our membership cards, this is what low budget independent horror is all about. All together now… "BOOOOYYYYYY!!!!"