CDB Bryan wrote a book titled “Close Encounters of the Fourth Kind” about the abduction phenomenon. He felt, after all the research, that either there is a previously undocumented mental illness or people were really being abducted. The “victims” really did believe they were being abducted.
I favor the mental illness explanation.
From the link above:
"Machine Elves"
One common feature of the hallucinogenic experience caused by DMT are hallucinations of humanoid like beings, characterised as being otherworldly. The terms Machine Elf was coined by ethnobotanist Terence McKenna for the experience, who also used the terms fractal elves, or self-transforming machine elves.[91][92]
Hallucinations of strange creatures had been reported by Szara in the Journal of Mental Science (now the British Journal of Psychiatry) (1958) “Dimethyltryptamine Experiments with Psychotics”, Stephen Szara described how one of his subjects under the influence of DMT had experienced “strange creatures, dwarves or something” at the beginning of a DMT trip.[93]
Other researchers of the experience described 'entities' or 'beings' in humanoid as well as animal form, with descriptions of "little people" being common (non-human gnomes, elves, imps etc.). This form of hallucination has been speculated to be the cause of alien abduction experiences through endogenously occurring DMT.[94][95]
Perhaps a sudden spike in DMT levels in these people brings about these experiences.