High school student Courtney Bates (Crystal Bernard) finds herself plagued by terrifying dreams of the Driller Killer (Atanas Ilitch) wielding his electric drill against those she loves. Despite her mother, Mrs. Bates (Jennifer Rhodes), reassuring her that such frightening dreams are common, Courtney cannot shake the remnants of trauma from when the Driller Killer attacked her sister Valerie (Cindy Eilbacher) years ago. To spare her friends from the burden of her sister's fate, Courtney invents a story that Valerie is busy studying in Northern California.
As her 17th birthday approaches, Courtney, who has never seriously dated, is intrigued by her handsome classmate Matt Arbicost (Patrick Lowe). She invites him to their all-girl band rehearsal, and after impressing him with their sound, he shares a kiss with her. Before heading out for a birthday getaway with her friends—Amy (Kimberly McArthur), Sally Burns (Heidi Kozak), and Shelia Barrington (Juliette Cummins)—at a condo owned by Sheila’s father, Courtney experiences another unsettling nightmare featuring the Driller Killer and a warning from her sister.
Upon arrival at the barely-finished Desert Springs condominium, the friends attempt to create a festive atmosphere despite the emptiness. They indulge in drinks while discussing their dreams of musical fame, only to find themselves engulfed in wild antics, including an unexpected pillow fight observed by their friends Jeff and T.J. (Scott Westmoreland and Joel Hoffman). Night descends, and Courtney's vivid nightmares turn more sinister, ultimately depicting her sister’s gruesome demise at the hands of the Driller Killer.
As the girls attempt to have fun, Courtney's hangover symptoms and bizarre visions lead her to alarming encounters with a seemingly blood-filled faucet and disturbing illusions involving her friends. After moments filled with dread, she feels the creeping terror of the killer, ultimately realizing he is not just a figment of her imagination when tragedy strikes and Matt is brutally murdered.
The Driller Killer, clad in black leather and a penchant for rock and roll, moves through the chaos, claiming Sally’s life and isolating the remaining friends. Panic rises as Amy, Jeff, and Courtney discover the reality of their horrifying situation. Despite a frantic attempt to call for help, the police dismiss their pleas as pranks, leaving them vulnerable to further onslaughts. Tensions culminate as the Driller Killer continues his rampage, leading to devastating losses among the group.
In a moment of desperation, using a blow torch, Courtney resolves to stand against the killer, igniting him in flames and leading to his apparent demise. As morning arrives, the aftermath brings police and ambulances to the scene, but a haunting twist reveals that Courtney might still be trapped in a nightmarish cycle, awakening beside Matt with another vivid dream of the Driller Killer following closely behind, leaving her fate uncertain.
