Maggie, portrayed by Jill Schoelen, experiences terrifying nightmares about a mysterious man and confides in her friend Suzanne, played by Dee Wallace. As Suzanne immerses herself in writing a screenplay centered on a girl named Sarah, she finds it increasingly difficult to attend to Mark, portrayed by Derek Rydall, who is seeking her attention. Mr. Davis (Tony Roberts) is set to uncover his students' film project featuring a trio of Z-series films filled with unexpected twists. The eager students—including Tina (Freddie Simpson), the wheelchair-using Bud (Malcolm Danare), Leon (Elliott Hurst), Joanie (Ivette Soler), Cheryl (Kelly Jo Minter), and Toby (Tom Villard)—all rally around this exciting endeavor.
The films are slated to premiere at the Dreamland, an aging theater tragically ravaged by fire. To bring their vision to life, Dr. Mnesyne (Ray Walston) will supply all the essential props. During their frantic preparations, the group stumbles upon Possession, a film depicting Lanyard Gates (Mat Falls), a deranged individual who documented his dark attempt to sacrifice Sarah. In a shocking twist, Maggie learns that Lanyard is her father, and Suzanne miraculously saved both their lives from the devastating blaze.
Haunted by recent menacing phone calls, Suzanne ventures into the theater alone one night. Meanwhile, Mark takes Joy (Karen Witter) along but is resolved to search for Maggie. To their horror, a killer strikes, first claiming Mr. Davis with a particularly sinister mosquito prop. Disguised as Mr. Davis, the murderer then takes Tina's life, before following up with a brutal attack on Bud disguised as Leon. With a sense of impending doom, the killer finally faces Maggie, leaving Suzanne incapacitated, clutching a gun.
In a shocking revelation, Maggie discovers that Toby is the mastermind behind the slaughter. Disfigured from the fire, Toby is intent on reenacting Gates' vile sacrifice. In a race against time, Mark consults Toby’s landlord (Will Knickerbocker) before dashing back to the theater to save Maggie. As tensions escalate, Cheryl and Joanie are quick to eject Joy and another patron (Scott Thompson) from the theater, locking the doors as Mark is forced to scale the walls to make his entry.
As the chaos unfolds, Toby takes center stage for the Possession screening, causing the audience to laugh uncomfortably when Maggie declares, > "it ain't a film." In a desperate bid for survival, Mark confronts and ultimately stops Toby using the very mosquito prop that became a deadly weapon. In the aftermath of the harrowing ordeal, Toby and Maggie share a moment of relief as they offer their statements to the authorities.
