you should probably not write the br tags to the file. instead, just use the nl2br function after reading the file and displaying on the page.
then, don't use the nl2br tag when the user goes to edit the story.
--
if it has to stay the way it is now.. then when bringing it to the edit screen, you can pass it thr a string replace function.
$story=str_replace("<br>","\n",$story);
this will replace the <br> tag with a new line character.
i really think you should not use nl2br when writting it to the text files. rather after you open the text files and pull the story into a variable, then use nl2br to display it in html.