Judith Gray, [Tracy Scoggins], and Matt Cable, [Jeff Celentano], are a pair of police officers who are dating, stationed at the Toyland Warehouse as they prepare to arrest two illegal gun dealers, Lincoln and Hesse. Judith opens up about a strange dream she’s been having—two boys, one good, one bad, playing a war—and she also reveals that she is pregnant. The tense confrontation ends with Matt firing at Hesse while Lincoln kills Matt. The two gun dealers slip away into the maze of the warehouse and split up, with Judith determined to track Lincoln down.
In the security office, security guard Charnetski, [Pete Schrum], places an order at a chicken-delivery service run by his friend Mark Wayne, [Bentley Mitchum]. Mark arrives at the warehouse with Charnetski’s order, and meanwhile the toys surrounding a dying Hesse come to life and brutally murder him. Judith and Lincoln find themselves locked inside a storage closet, but they are eventually freed by Mark and Charnetski. Charnetski heads off to call the police, yet he too is graphically murdered by the murderous toys, leaving Mark and Judith in stunned horror. A toy named Baby Oopsy Daisy then draws a pentagram around Charnetski’s corpse, signaling something more sinister at play.
A runaway named Anne, [Ellen Dunning], who had been hiding in the air-conditioner shafts, joins the group. Mark explains that the doors won’t open until morning but can be opened from the office. Judith cannot leave Lincoln behind, so Mark and Anne head toward the office together. They are ambushed by Mr. Static and Baby Oopsy Daisy. Mark fights back, but Baby Oopsy Daisy kills Anne. Mark finally shoots Jack Attack’s head off with Charnetski’s shotgun. Judith slips into a dollhouse and is pulled into the demon’s lair, where a spirit-cursed boy reveals himself as a demon who longs to become human. To do so, he must impregnate a woman so his soul can transfer into the unborn child, where the baby’s soul would be consumed to take over its shell. His last birth happened 66 years earlier on Halloween night, 1925; the baby did not survive, and he was buried beneath the warehouse, trapped until Hesse bled onto the area.
Lincoln escapes while Judith is trapped inside the dollhouse, and he storms back toward Mark. Judith finally shoots Lincoln, and the toys around them come to life in a furious display. They shoot their way through the room, including Baby Oopsy Daisy. Grizzly Teddy mutates into a man-sized monster and pursues Judith. A toy soldier helps her escape as she becomes momentarily trapped again. The demon, now in human guise, closes in to rape Judith, but the toy soldier fires and frees her, turning the demon back into a real boy. The two kids then engage in a battle, explaining the war card game from Judith’s dream. As the demon readies a final strike against the boy soldier, Judith stabs him with the boy soldier’s sword, sending the demon back to Hell. Before vanishing, the boy soldier reveals that he is the spirit of the son Judith is carrying. Judith reunites with Mark and the couple waits for the warehouse doors to finally open and grant them passage back to the world.
