A story within a story, also referred to as an embedded narrative, is a literary device in which a character within a story becomes the narrator of a second story. Multiple layers of stories within stories are sometimes called nested stories. A play may have a brief play within it, such as in Shakespeare's play Hamlet; a film may show the characters watching a short film; or a novel may contain a short story within the novel. A story within a story can be used in all types of narration including poems, and songs.
In the Bible, Jacob has a dream about a ladder to heaven. Having a character have a dream is a common way to add an inner story within a larger story. (Painting by William Blake, 1805)
Cervantes finds the manuscript with the further adventures of Don Quixote. Illustration by Ricardo Balaca for the 1880 edition.
In literature, film, and other such arts, an unreliable narrator is a narrator who cannot be trusted, one whose credibility is compromised. They can be found in fiction and film, and range from children to mature characters. While unreliable narrators are almost by definition first-person narrators, arguments have been made for the existence of unreliable second- and third-person narrators, especially within the context of film and television, but sometimes also in literature.
Illustration by Gustave Doré of Baron Munchausen's tale of being swallowed by a whale. Tall tales, such as those of the Baron, often feature unreliable narrators.