Dolls is definitely a neglected film of this era. I was a young man during this time period and I don't remember this one at all. Dolls is a mixture of fantasy and horror in the vein of Troll (1986). The cinematography and direction are quite good. After all, Stuart Gordon [Re-Animator, Honey I Shrunk the Kids] is at the helm so one would expect decent direction. The soundtrack by Fuzzbee Morse manages to avoid all the 80's cliches and give us music that is more classic and timeless. Finally, the set decoration is spot on, giving the mansion where most of the action takes place a classic, old school feel.
There are, however, two weak spots that prevent this movie from being a classic. The first is that all the characters seem like stereotypes of real people. There's a Madonna wanna-be complete with her Desperately Seeking Susan ensemble. The man who befriends the little girl is ridiculously childlike. The family at the center of story is a mess in a way that makes you want to call child protective services ASAP. None of these are good things because the audience never deeply cares what happens to these people.
The second weakness is in terms of special effects. All the close-ups of the dolls are good. They have a really interesting and unique look. It falls apart for me when they resort to stop motion animation to bring them to life. It looks a bit jerky and amateurish for 1980's standards and detracts from the power this film could have had with better effects.
Overall, this one is well worth your time. If you're a fan of 80's horror you will wonder how you missed this one.
RATING: Very Good.
For more info check out the film's entry in IMDB.