The film opens with a family being hung up like scarecrows in a corn field with sacks over their heads and burned alive. It is revealed to be the nightmare of nine-year-old Dylan Collins, who is staying in a rural farmhouse with his twin brother Zach, and their mother Courtney (Shannyn Sossamon).

Dylan is visited nightly by a group of ghostly children, led by a boy named Milo, who force him to watch Super 8″home movies” of families being murdered in various savage ways; decapitated and eaten alive by alligators (“Fishing Trip”), electrocuted in a puddle of water on a kitchen floor (“Kitchen Remodel”), buried in snow on Christmas Day (“Christmas Morning”) and strapped to chairs with their mouths forced open and having their teeth mutilated with drills (“Dentist Appointment”). Meanwhile, Deputy So & So from the first film, who investigated the Ellison Oswalt case, is independently researching the murders connected to Bughuul, and is burning down the homes where each murder took place before another family can move into them. He arrives at the farmhouse to destroy it, but is interrupted when he realizes Courtney and her sons are living there. He tells Courtney he is a private investigator, and she allows him to investigate an abandoned church on the property where a gruesome murder took place.