In the small town of Wardenclyffe, high school senior Sarah Quinn is finding it particularly challenging to complete her application paper for Columbia University. Her boyfriend Tyler Mitchell surprises her by sneaking through her window, but their reunion is cut short when Sarah's mother, Kathy, and her brother Sonny catch them, leading to Tyler being sent home.
The next morning, Sam Carter, Sonny's best friend, arrives for a weekend visit. As Kathy stops at a store en route to school, she seems to strike up a rapport with the manager, Walter. At school, Sam puts up flyers to promote their junk pickup service, only to be targeted by local bully Tommy Madigan and his goons. When Sam stands up for himself and Sonny, he earns Tommy's ire, who vows to make their lives miserable.
With Kathy working late, she assigns Sarah the responsibility of watching the boys. However, Sarah plans to sneak out with Tyler, while Sam receives a mysterious call to pick up some items from a seemingly abandoned house. Inside, as the boys rummage through junk, Sonny discovers an old stuffed cat that, upon prying it from the fireplace, reveals a secret compartment containing a locked book. When the boys accidentally release Slappy, a dummy with a mind of its own, chaos ensues when Sonny recites an incantation that brings him to life.
Their blissful ignorance is shattered when Tommy and his gang confront them, leading to humorous mishaps orchestrated by Slappy, who uses his powers to pull down Tommy's pants multiple times. Victorious, the boys make a hasty escape on their bikes. That evening, as Sonny practices his science project featuring Nikola Tesla, he bewilderingly realizes that Slappy is fully aware and capable of interaction.
Meanwhile, Sarah's emotional roller coaster intensifies when she discovers Tyler canoodling with another girl at a concert, leading her to vent her frustrations to Sonny, all while Slappy overhears their conversation. Slappy continues to meddle, sneaking into Sarah's backpack and causing a series of mishaps, including injuring Tyler during a school decoration setup. Tensions rise, and Sarah confronts Sonny about Slappy's existence, leading to their harrowing discovery that the dummy indeed has sinister intentions.
The plot thickens as they decide they must eliminate Slappy, leading to a series of frantic attempts to dispose of him, culminating in strange encounters and increasing havoc. After delving deeper into R.L. Stine's frightening tales, including the infamous "Goosebumps," the kids realize they need the book back, but find that Tommy has it.
As Slappy wreaks havoc in town, bringing Halloween decorations to life and threatening everyone, the kids bravely confront their fears. With cleverness and courage, Mr. Chu helps the children disguise themselves to infiltrate Tommy's house. In a desperate race against time, they seek the power of the unfinished book to combat the monsters unleashed by Slappy.
The climax unfolds at the Tesla Tower, where a confrontation with Slappy reveals the depths of his obsession for a family, specifically a mother. As battles rage between monsters and the kids, Stine’s arrival signals hope. Sarah ultimately outsmarts Slappy and harnesses the book’s power to resolve the chaos, restoring both her mother and Walter back to their original forms, albeit with no memory of the events.
In the aftermath, Sarah submits her completed essay, receiving joyous news of her acceptance to Columbia. Meanwhile, back at Stine's home, danger looms as Slappy emerges once more, ready to execute his sinister plan of pulling Stine into his own book—an alarming twist to their story!
