This article focuses on Katherine Anne Porter’s semiautobiographical modernist novella Pale Horse, Pale Rider, a rare example of literature with a direct reference to the Spanish flu pandemic during the World War I. The article first provides a brief overview of critical approaches to the novella, situating it in the literary plague canon, then focuses on the war and the pandemic as the external factors that are not shown only to change the face of the society, but also to deeply affect people’s minds. As the main protagonist Miranda falls ill with the influenza and enters a strenuous combat with the disease, the reader gains access to her subconscious through a series of dreams and deliriums that Miranda experiences during her illness. These will be analysed using Bion’s theory of dreams to show that they present Miranda’s affective response to the external reality as well as her capacity to digest the previously indigested emotions.