Joe Simon, Jack Kirby and Mike Royer introduce the Earth-1 Sandman in his eponymous book, which debuted with the Winter 1974 issue.
The Sandman, who is not given any other identity in this issue, is really a secondary character in the story. The tale centres on a young boy, Jed, and his grandfather. Jed is having nightmares which are caused by a really ugly doll that he sleeps with, the Werblink. The Sandman is monitoring Jed's dreams from his Dreamdome, entering the nightmares and rescuing the boy.
The grandfather seems to know that the doll is the cause of the problems. He does what he can to destroy it, takes it out to the beach and buries it.
The Werblink is one of many created by General Electric, a Japanese evil genius with a computer head. The story explains that his real head was destroyed while leading a kamikaze attack during World War 2. The most recent issue of Bug - the Adventures of Forager gives a somewhat different explanation of this, but still sets the injury during that war.
General Electric gets free from the hospital where he is being kept, the Werblink gets dug up by a dog, and nightmares begin to spread again. Sandman sees this on his monitors and heads out to deal with the situation alone. He has two helpers, Brute and Glob. They are living nightmares, and kept sealed in tubes. Sandman uses a sonic whistle to summon and control them.
The hero also carries a box of special sand that he can use to put people into a peaceful sleep.
Sandman, Jed and some foreign agents are all after the Werblink. Sandman and Jed get captured by General Electric, and the hero loses his sonic whistle. Brute and Glob get free on their own and come to save him. Glob uses the whistle to seemingly shatter General Electric's head.
It makes for a really bizarre story, though sort of typical of this period in comics.