I like to think it comes from my own fantasies and imagination.  Still, it's hard to create stories that are particularly original, or at least not overly derivative.  I rack my brain for an interesting character or concept, and try to expand upon it.  I've even started stories backwards, an ending that I wish to achieve, but this tends to be the hardest method.  

And naturally, I love to twist ideas that other authors have explored, perhaps in a more detailed or enticing fashion.

Hope that helps.

-Xxana