Aunt Stella Binford, portrayed by Eve Brent, discovers her late dance partner's son, Eric Binford, played by Dennis Christopher, dozing in his bedroom with a classic film playing on the television. As she awakens him, Stella chastises Eric for wasting his life indulging in movies day and night. She is filled with regrets about how Eric's father dismantled their dance duo and how a car accident, which occurred after she was called away to care for the ailing young Eric, cut short her career, leaving her with paralyzed legs. During breakfast, Stella angrily sweeps Eric's collection of VHS tapes off the table, urging him to pursue knowledge rather than mere entertainment. In a humorous exchange, Eric mimics James Cagney, retorting that Stella talks too much, warning her that one day she would regret her words.
At Continental Film Services, where Eric works, he faces the wrath of his abrasive boss, Norman Burton, who yells at him for his tardiness and orders him to make a delivery. Meanwhile, at a nearby police station, LAPD Captain M.L. Gallagher, played by James Luisi, meets with psychiatrist Tim Thomerson to discuss his role in rehabilitating juvenile offenders—a task Gallagher doubts will succeed. The more amiable Officer Anna Oshenbull, portrayed by Gwynne Gilford, introduces Moriarty to his new office, housed in an old drunk tank in the basement.
Before heading out on his delivery route, Eric wagers his workmates, Richie (played by Mickey Rourke) and Bart (Hennen Chambers), $20 apiece that they won't guess the full name of Rick from Casablanca. After delivering a film to a local studio, Eric finds himself captivated by an aspiring model with an Australian accent, Marilyn O'Connor, portrayed by Linda Kerridge. Enchanted by her beauty, he daydreams about Marilyn channeling Marilyn Monroe, singing 'Happy Birthday.' After impressing her with his extensive movie knowledge, she requests a ride back to work, leaving an indelible mark on Eric’s heart.
Later, Eric arrives home and surprises Stella by tidying his room and dressing smartly for his date with Marilyn. After mimicking Cary Grant, he boldly declares that he is going out with "Marilyn Monroe" and seeks movie money from Stella in exchange for a back rub upon his return. However, the night does not go as planned as Marilyn never shows up.
While dining elsewhere, Marilyn finds herself entangled with a manipulative ex-boyfriend, Joey, played by Peter Horton, who attempts to lure her back into modeling. Wondering about Eric, she rushes to meet him, but by the time he returns home after a long wait, she is already having dinner. In an intense twist of events, Stella confronts Eric about his obsession with films. When he reenacts a scene from Kiss of Death, he accidentally causes her untimely demise. Loss consumes Eric, leading him to disregard Stella’s health books and embrace the chaos brewing inside.
As the days unfold, Eric finds himself attending Stella's funeral dressed as a film character, spiraling deeper into madness. He reinvents himself by embodying characters from classic horror films, engaging in increasingly violent acts, such as confronting Richie at a carnival and taking his life. With pressure mounting from the police—and especially Captain Gallagher's skepticism towards psychiatrist Moriarty's insights—Eric's life descends into a web of violence and madness.
After a series of chilling encounters, Eric’s obsession culminates in a deadly confrontation with the people in his life. Dressed as a movie character, he bonds with Marilyn during a photoshoot, but as their relationship deepens, so does Eric's desperation. In a shocking showdown at Hollywood's Chinese Theater, a cat-and-mouse game ensues with Moriarty and police SWAT teams converging on Eric, leaving chaos in their wake.
Ultimately, as Eric succumbs to the consequences of his twisted dreams and the onslaught of police bullets, he recreates an iconic scene from Cagney’s film, affirming both his identity and tragic fate in the compelling world of cinematic madness. The movie ends on a haunting note, leaving audiences pondering the thin line between reality and fantasy.
