Australian filmmaker Cate Shortland's "Lore," which was shortlisted for the foreign Oscar, is now playing in limited release. After her 2004 debut "Somersault" broke out Sam Worthington and Abbie Cornish, Shortland took her time coming back to helm another film. Set in vastly different territory, World War II drama "Lore" made its debut in Toronto. It was worth the wait.

While both films center on teenage girls, "Somersault" takes place in contemporary Australia and German-set "Lore" focuses on the daughter of German Nazis. When Lore's parents are imprisoned by Allied forces, she leads her younger siblings toward refuge with their grandmother. Shortland's saga is a psychologically complex examination of guilt and inheritance, as well as identity and sexuality. It plays like a dark fairy tale and offers a rare perspective on the holocaust.

Shortland talks below about her hiatus, living in Germany while developing "Lore" from the novella "The Dark Room," finding her actors, working with cinematographer Adam Arkapaw ("Animal Kingdom," "The Snowtown Murders") and the best advice she ever got.

Sophia Savage: 'Somersault' was an excellent debut. What projects were you working on before diving into 'Lore'?

Cate Shortland: After 'Somersault' I wasn’t sure I wanted to make films anymore, or at least for a while. I worked on some TV and developed an American feature, for four years, which never got made. My partner was working in South Africa on a script and I went and lived in Johannesburg. And it was there I started to work on Lore, travelling a few times back and forward to Germany. We also adopted two children and I was so happy to be with them and not working.

SS: Was there a personal connection to the source material for 'Lore' that drew you to it?

CS: At university I had studied History, majoring in Fascism and African American History, a big part of which was slavery. So I have always been interested in the corruption of power, statewise and even in a microcosm like a family. My partner Tony’s family left Germany in 1937 as Jewish refugees so this also gave me the opposite perspective to the book, 'The Dark Room.' Lore was the most compelling novella in 'The Dark Room' because it was from the perspective of the perpetrators. This fascinated me as I had never seen it before.

SS: How crucial was moving to Germany for the making of the film? Would you like to do something similarly immersive again?

CS: Yes. It was an incredible life experience and one of the great things about making a film. How much you have to live your work for the duration. It gave me a familiarity with the culture and language I would never have obtained living in Sydney. As well as doing workshops with elderly people who had been in Hitler Youth and Bund Deutscher Madel. At times it was difficult, as I did six weeks in Berlin on my own with my baby daughter. And the material I was researching was horrible. I visited many concentration camps and really read a lot and watched a lot of documentaries dealing with the Holocaust and the war and its effect on the German people. So sometimes there were tears and anger. It is easier when I have my family around. Denial is always the hardest thing to deal with. When I dealt with transparency and truth, it was always inspiring.

SS: You have a great eye for talent. Cornish and Worthington broke out with 'Somersault,' and Saskia Rosendahl will likely do the same here. Do you prefer to work with unknown actors, or is there just a particular quality you are looking for?

CS: Truth. I think like every director-- just believability and emotional truthfulness. As well as unpredictability. You want to be surprised by your cast. Saskia and Kai Malina (Thomas) are both very brave actors. Very easy to work with. For me as a director, working with both of them was a real privilege.