Were he alive today, Bruno Bettelheim, the child psychologist and analyst of fairy tales, would have plenty to say about the art of Dina Goldstein and Ray Caesar. Goldstein and Caesar, who are both Canadian, are fabulists who have re-invigorated the cliché of “fairy tales for adults”. Later this year, they are being brought together for an exhibition in Manchester at the Richard Goodall Gallery, a long-time champion of their odd and disquieting work.

Both artists have been associated with the growing genre of pop surrealism, a term usually applied to underground art from the American West Coast, often made digitally, that’s deliberately kitsch or creepy. But they are quite different in intent and technique. Caesar uses 3D-modelling software to manipulate images of dolls and close-ups of human skin—his own and his wife’s—creating flat, delicately rendered portraits of adolescent and pre-pubescent girls (or so they seem). Beautiful but icy, unreal and sometimes deformed in singular ways, they share the magical realism of Paula Rego paintings like “The Fitting” that suggest fairy-tale romance gone badly wrong, but are too mysterious for explicit back-stories. If he is a poet of macabre illustration, Goldstein is primarily a photographer and subversive storyteller, re-framing familiar folk tales with an ironic, feminist twist that pays homage to the novelist Angela Carter. But each draws heavily upon idiosyncratic experiences of children and childhood.

This is peculiarly true of Caesar, a British emigré to Canada, who worked for 17 difficult years as a medical photographer at the Hospital for Sick Children in Toronto, where he still lives. “Making pictures can be like putting your thoughts in a diary,” he told me recently. “The process has a way of allowing oneself to remove the image from your mind. I saw very brave children with cancer consoling their parents who had broken down. I decided to make pictures of what I saw and felt, and make those pictures show both pain and beauty.”

The result is not as you expect. Far from being brave victims, his figures are beautiful, androgynous and fully empowered. Some are also idealised self-portraits, since as a child Caesar liked to dress as a girl, to “escape from who I was”. In their antique lace finery, with their great, white pompadours, these startling creatures look exquisitely pale and elegant, like little Victorian Alices transported to the court of Louis XIV. They command the empty, baroque rooms in which they’re placed with a precocious self-possession. No wonder Madonna is reportedly a fan and collector.

And then the mood darkens. You begin noticing their bared teeth and that their heads are slightly too large. Some, with splayed limbs, promise erotic mischief, like heartless little minxes from an otherworldly St. Trinian’s; others, with tentacles for arms and legs, are even more troubling. Each artwork tells its own story. Seen all together, they form a gallery of haunted beauties, trapped forever, as one reviewer put it, “between woman and girl, human and creature”, in a world without conscience or kindness—contemplating their revenge, perhaps.

Caesar, 57, lives very privately, the better to be “a voyeur of the human species”. Goldstein is an internationally known artist, celebrated for her two series of conceptual tableaux, “Fallen Princesses” and “In the Dollhouse”, which speculate on how fictional childhood icons would fare in the real world—generally badly, it seems. Cancer, obesity and alcoholism stalk the heroines of “Fallen Princesses”, her sour counterblast to the Disney message of “happily ever after”. Snow White (above) has become a harassed mum-of-four, surrounded by household mess, while her Prince Charming slumps in front of the TV, beer can in hand. Rapunzel sits in a chemo ward, bald and forlorn, clutching the remnants of her long, golden hair; and Cinderella, in a bleak and poignant image, peers into a shot glass of whiskey, still in her shining, blue ball gown, but now in a dingy bar of predatory-looking men.

“In the Dollhouse” is even more forthright (and hilarious) in debunking the saccharine iconography she thinks is fed to children. This time, her targets are the glossy Mattel dolls, Barbie and her dimpled sweetheart Ken. In sequenced images, she shows happiness unravelling as Barbie discovers Ken is bisexual, caught in bed with another gorgeous, plastic specimen. Ken wears Barbie’s stilettos, sleeps with a heart-shaped pillow, and shaves his legs in the bath while a stony-faced Barbie perches on the toilet. Towards the end, she is wearing a dishevelled suit and tie, and has hacked off her famous tresses, a tragi-comic picture of disillusionment.

A satire on the pursuit of perfection (and of plastic surgery), “In the Dollhouse” also riffs amusingly on the sexual ambiguities of dolls and mannequins and how we anthropomorphise them. The original Barbie was a German sex doll. Mattel de-sexualised her and Ken, but gave them a spoof history of relationship problems, a soap opera to keep the little kids hooked. Goldstein re-sexualises them by casting glamorous, real-life actors, in costumes and make-up, and shooting their scenes like a magazine ad. Crucially, however, she restores artificiality with props such as bad wigs and settings (bathrooms, bedrooms) saturated in candy-pinks. It is her critique of corporate sponsorship.

Now 45, Goldstein began as a photojournalist, shooting racetracks and other sub-cultures in her home-town of Vancouver. Her Israeli family had emigrated when she was eight, and she arrived in Canada speaking no English and ignorant of Western children’s literature and movies, which she only discovered when her young daughters were growing up. Now six and ten, their innocent questions about religion have inspired her current, and most controversial, exhibition in Vancouver, “Gods of Suburbia”. She has taken the great religious figures—Jesus, Muhammad, Buddha, even Satan—and unleashed her lethal technique of humanising them. Her depiction of the elephantine god Ganesha, being teased in the school playground for looking different, has caused outrage among Hindu devotees, but was not meant to provoke: she relates it to her own difficulties as an immigrant fitting in. To illustrate the burdens of modern woman, she sends Lakshmi, the divine embodiment of wealth and beauty, to the kitchen to be a domestic goddess: Nigella Lawson in a sari. “Now she carries the world on her shoulders,” says Goldstein.

Pop surrealism is a very loose description of what she and Caesar do, and they disagree, typically, about its applicability to them. Goldstein, who is more about social commentary, embraces it; Caesar, who has been called “the Father of Digital Art”, hates any categorisation. To me, his unique gift is to inhabit the strangeness of childhood, and Goldstein’s is to interpret it. “If only we could recall how we felt when we were small”, Bettelheim wrote wistfully. That is their real achievement.

Enchanted Worlds: The Art of Ray Caesar and Dina Goldstein The Richard Goodall Gallery, Manchester, November 7th to December 12th. Gods of Suburbia The Diamond Foundation Gallery, Vancouver, until August 20th