This isn't bad. Not bad at all.
Just a few problems though: Some of the animations looks a bit stiff. The 3D environments with 2D characters don't really mesh because the characters aren't drawn in a way that gives the illusion of depth, so they look like cardboard cutouts instead of actual people that exist within that world. It's especially distracting when the camera did a 360 spin during the fight with Fear.
And, the performances felt a tad lacking. That girl was letting out a battle cry that sounded like she was trying not to wake someone up.
Also, minor thing; Is Will Power famous? That alleyway is littered with posters of him, and it feels a little strange seeing all that, and the girl isn't like "Hey, it's Will Power! Wow!" or at least giving some sign of recognition.
I will also say that I really like the design of Fear. He seems to be a pastiche of Jack Skellington from The Nightmare Before Christmas, and I feel that fits very nicely. Minor nit-pick on that is that he has a giant sword as a weapon. As I understand, fear, as an emotion, is usually a bit more subtle than that. I'd like to think that it's a slow burn that builds on itself over time, until it becomes paralyzing, or stifling, suffocating, etc. Oppressive is a good word, too. And oftentimes, what we fear most is only inside our heads.
So, him having Pyramidhead's knife seemed a bit out of place. Not to mention that he's wearing a rather fine suit and hat, and the big meat cleaver clashes a lot with that. What I'd do is go with something that doesn't put him in direct conflict with Will or Mindy (wouldn't do to get his suit all ruffled), like have him create a zone where there's no light. Like, complete pitch-blackness, and cold (because chills running down spines and such), and you're trapped in there with your worst fears-- which, because of Fear, are totally real, and can definitely hurt you. And, the more afraid you are, the stronger your nightmares get. Fear tends to feed into itself, after all.
Then again, I'm not really an artist, and only dabble in writing, so take it with a grain of salt.
Again, overall this shows a great deal of potential, and I'd love to see how it progresses. So, 3.5 stars for now, and have a good one.