Set in 1968, the eerie ambiance of Halloween envelops the town of Mill Valley as a young man named Ramon Morales drives into town, unaware of the chilling events that will unfold. Meanwhile, horror enthusiast Stella Nicholls receives a call from her friends Chuck Steinberg and Auggie Hilderbrandt, inviting her to join in on a prank against the local bully, Tommy Milner. The jock and his friends have been throwing beer bottles at a neighborhood scarecrow named Harold, and Tommy even takes a swing at the inanimate figure.
In a rather disgusting twist, Chuck fishes poop out of the toilet to join his friends in vandalizing Tommy's car with eggs and toilet paper while he is out with Chuck's sister, Ruth Steinberg. This act backfires as Tommy drives his car into a fence in retaliation, ultimately leading him and his friends to chase the kids. They find refuge inside Ramon's car at a drive-in theater, but the bullies force them out. Just as they leave, Tommy cruelly comments on Stella's familial struggles. Seeking distraction, Stella invites Ramon to explore a rumored haunted house—the residence of the infamous Sarah Bellows, a woman tied to a disturbing local legend about poisoning children.
In a brave move, they manage to break into the house, but Chuck's antics lead him to hide in a closet where he witnesses the room transform before his eyes, encountering a vision of an old woman with a dog. Concurrently, Stella and Ramon uncover Sarah's sinister book of scary tales, which launches them into a series of supernatural horrors when they become trapped by Tommy and his gang. The force that eventually liberates them foreshadows the sinister events to follow, including vandalism of Ramon's car, and leads him to seek shelter in Stella's basement after discovering he has nowhere else to go.
As night falls, Tommy's drunken encounters lead him back to Harold, setting off a chain of gruesome events that continue as Stella reads from the book. Among these stories is one involving Tommy himself, leading him to a horrifying encounter with Harold that leaves him transformed. Meanwhile, as morning breaks, Ramon faces a confrontation with Chief Turner, who grows suspicious of him, further complicating his situation in Mill Valley.
Determined to uncover the truth behind the disappearances, Stella teams up with Ramon, leading them to an unsettling discovery: Harold is now wearing Tommy's clothes. The spine-chilling tales unravel more as their friends start to vanish, tied to the pages of the cursed book. The urgency escalates when they learn of the spider-infested torment that befell Ruth, leading them to a panic-filled rescue.
The young friends find themselves entangled with Lulu Baptiste, who once worked for the Bellows family and holds secrets regarding the dark past of the cursed book. The horrors continue as they uncover messages within the pages that target each of them. Each ominous story spirals into catastrophic events, leading to the disappearance of Chuck as they unearth chilling truths about Sarah's innocence and the malevolent actions of her family.
As the fabric of their reality frays with each unfolding tale, they soon face off against the horrifying entities summoned from the text. The stakes rise dramatically, culminating in a race for survival against the Jangly Man, a monstrous figure described in the book, who threatens to claim everything dear to them.
Through perseverance and courage, Stella confronts the ghost of Sarah, ultimately vowing to tell her story—the truth about the Bellows family's dark legacy. With a quill in hand, Stella writes the new tale that frees Sarah and her spirit but not before witnessing more of her friends consumed by the malice birthed from the book.
In the aftermath, as life returns to a semblance of normalcy, Ramon prepares to embrace his own fate and answer the draft for Vietnam, leaving behind a heartfelt letter from Stella that promises hope. Stella, determined to expose the truth of the Bellows family history, begins documenting her findings, while she and Roy plan to utilize Sarah's book to recover their lost friends, facing the haunting reality that darkness lingers just beneath the surface, always waiting.
