Pajama Men, Soho Theatre

We must be on the night train, as there's something crazily dreamlike about the Pajama Men's mercurial railroad fantasy, The Last Stand to Reason, which was a runaway Edinburgh Fringe hit last year and is now, deservedly, back at Soho by popular demand.

These two guys – American duo Mark Chavez and Shenoah Allen, both in crumpled jimjams and with only two wooden chairs for a set – keep morphing into a host of different creatures. Thus they raise their game: not merely your standard character-comedy duo; more like a couple of walking, talking, whirring, prancing chimeras.

It seems we're aboard a locomotive – the Stanton Bullet – in a carriage full of hilarious kooks and dweebs. There are poseurs and coquettes; doddery oldsters and arse-oglers; a femme fatale; fey bandits; a girl-ghoul; some kind of burbling putto called Cute Thing; a blur of officious ticket collectors and a grinning psycho-killer.

The Last Stand to Reason is a fantasia that's impossible to summarise, but it's something like Murder on the Orient Express-meets-the Goons, or Lewis Carroll's Through the Looking-Glass (remember Alice’s episode on the train?) re-dreamt by a B-movie fanatic.

What’s winning, throughout, is Chavez and Allen's blend of instantly recognisable caricatures and exuberant, imaginative freewheeling. It may be a train ride, but you never know where it's going. A couple of ageing gossips, on the pull and all simpering giggles, suddenly turn into grotesque cawing crows, hands flapping. Allen also specialises in extended monologues that go flamboyantly off the rails. His train manager gets rolling with a petty moan about passengers who don't like his buffet snacks, only to veer off into a bonkers rhapsody about how crisps rustle like autumn leaves in New England. Then suddenly he's ranting about how no one cares if the kid's lost his leg on a rake, and surreally yelling, "It's over, Linda!"

In turn, Chavez (the one with a mop of darker curly hair and a longer elfin face) elevates his talent for mime, plus DIY sound effects, into a sublime mock card trick. Playing a show-off magician, who insists on pestering his fellow passengers, he shuffles and juggles a deck. This pack exists only in the audience's mind. Yet Chavez's impeccably timed "Brrrr...Brrrr", as the cards flicker upwards and shower back in his hand, wittily creates the illusion that he's an absolutely fab illusionist. The deck ends up flying right round the auditorium, like a boomerang, and then apparently functioning as an accordion. The audience are eating out of his hand by this point.

There are a few slack patches. One or two characters could be ditched. Not all of them actually fit in the Stanton Bullet set-up. The Pajama Men also need to beware of going a mite saccharine at the end of their shows: a flaw that calls to mind Robin Williams' early gigs as a stand-up.

These are cavils. The evening is crammed with brilliant nuggets of physical comedy and clever repartee, too. Allen is a hoot – and somehow ridiculously scary – as the Edwardian girl-ghoul: head swivelling like a ventriloquist's dummy, a glazed smile, and a high, fluting voice that spasmodically switches into a deep, demonic roar. Credit should also be given to the on-stage musician, Kevin Hume, who subtly adds to the cod-horror here with one sustained, quivering note on his synth.

The way Chavez and Allen bounce off each other is the main delight. They are both, clearly, still risking improvisatory moments and making each other laugh, while role-swopping at lightning speed with great panache. Recommended.

• Pajama Men at the Soho Theatre, London W1 until 29 May
• Check out what else is on at the Soho Theatre