There are certain novels, certain stories that fandom should read, certain tales that would transport the reader to worlds beyond the imagination of Englishmen, explore the space/time continuum in ways outside the comprehension of American pulps, and create nightmares undreamed by Anglophone literature. But strangely, they're not read. You won't find them in the dealer's room at any convention. If you go to the science fiction section in any bookstore or library, they will be mysteriously absent. Like secret texts in a Borges story, they are illusory, hidden away in the most unlikely of places (literature, mainstream fiction) that only the bravest dare to seek.
Until now. For, my friends, I have decided to give you the map, the key, the code, to this most wonderous of worlds, Latin American sf/f. I see you nodding sagely. "Ah, magical realism," you say. Not quite.
Let's look at a scene in the classic magical realist novel One Hundred Years of Solitude, by Gabriel Garcia Marquez. A man is murdered, and his blood runs out the door of his house, over hills and dales, across many miles, around blocks, up and down stairs, to his mother's house, in his mother's house, to the very room in which his mother stands. Had this been a horror novel, she would have proceeded to scream her head off. Had it been science fiction, scientists would have been called in to decipher the strange behavior of the blood. Had it been a fantasy novel, a wizard would magically appear and say, "This is a great marvel. We must gather together a rag-tag band of mismatched adventurers to go on a quest for the source of the blood trail." But as this is a magical realist novel, the mother calmly says, "Oh, my son has been murdered. I should go and bury him." She reacts to extraordinary events as if they were ordinary.
Magical realism is a distinct genre from fantasy, science fiction, and horror, although all are related. There are a great many books and stories from Latin America which aren't, strictly speaking, magical realism, but which fit quite nicely in fantasy and science fiction.
There are two anthologies which are indispensible for those who want to read more in this area. Black Water: The Book of Fantastic Literature, edited by Alberto Manguel, is an anthology of fantasy stories from around the world. It includes stories by well-known Anglophone fantasy writers such as Ursula K. Le Guin, but nearly a quarter of the stories are from Latin America. (Side note: it's downright creepy how many Latin American fantasy and horror stories involve ants.) Cosmos Latinos: An Anthology of Science Fiction from Latin America and Spain, edited by Andrea L. Bell & Yolanda Molina-Gavilan, has a wonderful selection of some of the most creative science fiction I've ever read.
If you want to go further, I'd recommend the following novels:
Law of Love, Laura Esquivel
Zorro, Isabel Allende
Aura, Carlos Fuentes
and short story collections:
Labyrinths, Jorge Luis Borges
Beastiary, Julio Cortazar
The Youngest Doll, Rosario Ferre
You can find all these in English translation.
Good hunting.