An evil spirit, known as the Dark Presence inhabits Cauldren Lake. This presence kidnaps Alice, forcing Alan to write a story which the Dark Presence can use to escape the confines of the lake. Alan realises this and writes himself an escape, which he manages, and wakes up in his crashed car. Through the manuscript pages he finds from the story he previously wrote, he pieces the whole thing together. He realises that there has to a balance, and that for Alice to live, he has to sacrifice himself. He does this, which is why Alice swims out of the Lake. Alan doesn't die however, he stays at the typewriter. His last spoken sentence, still sat at the typewriter, is "It's not a lake, it's an ocean", which suggests that he may well have written the escape the Dark Presence wanted. There will almost certainly be sequels which will see the story go further.
Is that all clear?