DJ Walters, a curious 12-year-old boy, spends his time observing his peculiar elderly neighbor, Mr. Nebbercracker, portrayed by Steve Buscemi, who is infamous for confiscating any belongings that dare to land in his yard. Mr. Nebbercracker has a fearsome reputation for yelling at kids whose toys or bikes stray onto his lawn, instilling a sense of dread around his eerie, old house.
DJ, played by Mitchel Musso, meticulously documents every strange event related to Nebbercracker's home, convinced something sinister lies within. Unfortunately, his concerns go unheard even by his own parents, who leave for a weekend dentist convention, entrusting DJ to the care of his uninterested babysitter, Elizabeth "Zee," portrayed by Maggie Gyllenhaal.
On one fateful day, DJ's adventurous best friend, Charles "Chowder" (Sam Lerner), visits him. When Chowder loses his valued basketball on Nebbercracker's property, he persuades DJ to retrieve it despite the obvious dangers. During this nerve-wracking escapade, DJ is caught by Nebbercracker, who becomes irate and appears to suffer a heart attack, only to be whisked away by an ambulance. Interestingly, moments after Nebbercracker collapses, the house itself seems to come alive, spewing smoke from its chimney.
Later that night, DJ begins receiving mysterious phone calls from Nebbercracker's house, filled with ominous silence. His suspicions heighten as he observes unusual activity within the home. Zee's boyfriend, Bones ([Jason Lee]), shares a chilling tale about how Nebbercracker supposedly devoured his wife after losing his kite near the house. After a confrontation with Zee, Bones heads to Nebbercracker's lawn only to be tragically consumed by the very house they are wary of.
DJ rushes to inform Chowder, who is skeptical of the unfolding drama. Attempting to prove his point, Chowder ventures into the Nebbercracker property but narrowly escapes when the house tries to ensnare him after he rings the doorbell. The next day, as Halloween approaches, DJ, Chowder, and Jenny Bennett, played by Spencer Locke, work together to thwart the house's hauntings. They discover that the home is a Domus Mactabilis, hell-bent on consuming souls, and its heart—an essential weakness—lies within its fireplace.
Undeterred by skepticism from the local police officers, Landers ([Kevin James]) and Lester ([Nick Cannon]), they hatch a daring plan to incapacitate the house long enough to destroy it. However, their scheme is thwarted when the officers stumble upon their cold medicine-filled decoy, leading to an unexpected arrest. Tragically, the house consumes the cops as well, leaving DJ, Chowder, and Jenny trapped inside.
Inside the house, they discover a grave truth: a collection of toys from Nebbercracker's yard along with the embalmed body of Constance, Mr. Nebbercracker's deceased wife. Realizing that Constance's spirit animates the house, they race against time to stop its rampage. Nebbercracker returns, revealing his heartbreaking past with Constance, who met her demise after being mocked by children when they were young. Torn by her loss, Nebbercracker tried to scare kids away, thinking he was protecting them.
In a climactic showdown, DJ encourages Nebbercracker to let Constance go. As the chaotic showdown escalates, Chowder bravely distracts the enraged house while DJ and Jenny make a daring climb to an adjacent crane with a stick of dynamite, ultimately leading to the house's destruction. The remnants of Nebbercracker's house lie in ruins, and the spirit of Constance departs, leaving DJ and his friends to mend the rifts created.
Later, basking in the glow of a Halloween night filled with laughter, the trio joins Nebbercracker to return lost toys to their rightful owners, finally allowing them a chance at redemption. As they head out for trick-or-treating—something they believed they had outgrown—the once-captive souls emerge from the house's depths, signaling a frightening chapter that has come to a close.
