A segment held in high regard within the history of Japanese animation, representing the ultimate manifestation of Yasuo Otsuka's obsession with animation. With Yoshifumi Kondo and Kazuhide Tomonaga handling the animation, and Nizou Yamamoto in charge of backgrounds, it is thus referred to as the "Kondo x Tomonaga Version." In the late 1970s to early 1980s, Hayao Miyazaki was employed at Telecom Animation. During this time, he was assigned to participate in the production of the US-Japan co-produced animation "Little Nemo" and created a large number of concept drawings for the film. At the time, Isao Takahata and Hayao Miyazaki were the Japanese side's backup directors. However, just as the company was about to publicly announce the project, Miyazaki, unenthusiastic about the plan, resigned and left Telecom Animation. Isao Takahata was also removed from the project in 1983 and left Telecom. Later, even Yoshifumi Kondo withdrew. After Miyazaki and Takahata departed, the project became even more directionless. The Japanese directors, including Yoshifumi Kondo and Yasuo Otsuka, were changed in a dizzying succession, while the persistently autocratic Katz was excluded from the production site. Two years of preparation passed without a final decision on the Japanese director. Before entering the crucial animation phase, the 4.5 billion yen production budget hit rock bottom, leading to a temporary suspension of production in August 1984. During this hiatus, from May 1985 to May 1986, Chris Columbus brought a plot, and based on this proposal, a final version was produced. Three years later, in 1987, Lake accepted an additional investment of 1 billion yen. Fujioka first terminated the contract with Katz, made staff changes, and restarted production at the newly established TMS Los Angeles, taking full command himself. Ultimately, the Japanese director was Masami Hata, who had experience in full animation from Sanrio's animated films. On the American side, upon the recommendation of Frank Thomas and Ollie Johnston, William T. Hurtz was appointed. The film was finally completed in 1988. Released on December 21, 1990, the VHS and LD included the pilot film and making-of as bonus features. Released on December 23, 2005, the DVD of "Little Nemo" included two types of pilot films (the Kondo/Tomonaga Version and the Dezaki/Sugino Version), making-of features, a digital gallery, and other bonus materials. Released on July 31, 2019, the BD "Memorial Anime Library Vol. 104: Little Nemo" included three types of pilot films (the Sadao Tsukioka Version, the Kondo/Tomonaga Version, and the Dezaki/Sugino Version) as bonus features.