Sora, and Riku entered the Realm of Sleep.
The need to unlock the seven Keyholes of Sleep in order to save the worlds that are trapped within the Realm of Sleep.
Sora, and Riku are young again, because Yen Sid is retraining them. They need to unlearn everything the learned before so they have apparently returned the ages that they were when they first gained the power to wield the Keyblade.
The enemies they face are the Dream Eaters.
Spirits, the brightly colored ones, are friendly whereas Nightmares, the darker ones, are not.
The entire game does not take place within the Realm of Sleep, and the Mark of Mastery, the initial reason why they are in the Realm of Sleep, is only a small portion of the game.
This game will introduce retcons that will alter the series completely.
An example is the retcon introduced in Birth By Sleep.
In Kingdom Hearts II, it was clear that a Nobody looks different than their original. Xemnas looked different than Xehanort, Roxas looked different than Sora, and Namine looked different than Kiari. It was never stated, but heavily implied.
Birth By Sleep, and the interviews leading up to it, altered this. Now, the presence of a heart is what decides what someone looks like. Roxas looks different than Sora, because Ven's heart was trapped within Sora's body and could not leave. Nobodies now look exactly like their original selves, and they don't age.
Roxas, Namine, and Xemnas are now "special Nobodies", because something makes them different so that they can still look different than their original selves.
Dream Drop Distance will most likely make further changes to Nobodies, the effect a heart has on appearance, what Namine is, etc.
So Dream Drop Distance is going to be a big entry to the series.