Warning: spoilers follow
This is a book about sex and death and drugs and what happens to reality when they collide. Jason Taverner has awakened in a reality he does not exist in -- this happens after he is attacked by an ex-lover with a deadly alien lifeform. Readers of Ubik would suspect that the rest of the book is a post-life experience, but what is happening to Taverner is quite real.
He gets tied up with the police, and with Police General Felix Buckman in particular. Buckman is a man of compassion who has been demoted from Police Marshall (this highest rank) for closing forced-labor camps and helping the students who live, barricaded in their campuses. Buckman is also in an incestuous relationship with his sister, Alys. Alys is a perfect foil for Buckman, as wild and anti-status quo as her brother is solid and committed to the health of his peculiar, police-state society.
Alys has taken a drug, a drug that changes not her own reality, but the reality of the people around her, creating by sheer effort of will the Taverner-less world. (She is a big fan of this TV host and singer, and his most recent romantic ballad, "Nowhere Nothin' Fuck-Up". The effort kills her, and the world returns to normal -- leaving Buckamn alone, grieving, and scrambling to avoid the scandal that is already beginning to erupt.
Dick wrote very quickly, strings of novels taking similar themes to very different ends. His entire body of work relates to itself, especially when seen through the dark mirror of VALIS. Taverner has a significant encounter with a potter. The pot she gives him, according to Dick, is "among people who know ceramics, openly and genuinely cherished. And loved." It is during this encounter that he begins to get his life back, through the machanism of Alys's death. It is clear that this is the same pot the Stephanie gives to Horselover Fat, the pot from which God manifests.