Film location / Location it took place

It seems that this movie is something of a weird case. It is a [West] German movie from 1985, filmed in German ... but the setting is actually at Virginia Beach. So if you find the original version of this movie, you'll feel pretty awkward because you're watching all the kids speaking German while everything is pretty much set in the U.S.!

I watched this movie off cable, in its original German with Spanish subtitles and originally thought that the audio signal had been swapped with a German dub. I had to check out IMDb to find out that the German audio was the original language and not a dubbed version.

I think the exterior scenes were shot in the US ( Virginia Beach ) and maybe the house outside.

But the interior and the big Labyrinth scene at the end is shot in a studio in Germany.

Just like THE NEVERENDING STORY which is mainly shot in studio in Munich and the street scene in Vancouver.

Five years later, but here's the deal... The director wanted to market the movie worldwide, so he trolled the military bases to find authentic American children and cast Germans in the adult roles. The bulk of the movie was filmed in Germany beginning in the summer of 1984 and when production wrapped in October, the crew headed to Virginia Beach for establishing shots to give it an authentic American feel. So yeah, you were looking at your local Krispy Kreme.

you're right. A few scenes have been filmed in the US but mostly was filmed around/in Stuttgart and Sindelfingen. Even a american suburban look-a-like was build at Sindelfingen (hometown of director Roland Emmerich). The Shopping-Mal, School Room, and all other indoors are filmed in Germany (Sindelfingen/Stuttgart).