it sounds like to me, that "death' was drawing out their souls. the grim reaper doll may have been cursed to speak and move with one goal, and "death" may have put some of himself into it to have the same goals. also he may have been punishing you for the killing of the doll by speeding up your heart until it goes so fast it bursts. also that house may have been the incarnation of your "fear house" this is where most if not all of your nightmares may take place
hope that helped a bit
