In the opening narration, Cryptessa Etcetera Etcetera tells the audience that the film is a work of fiction, but that it may be "realer than you think." She adds that "every one of us is a survivor in a lifeboat on a dark ocean." It is revealed that this is an excerpt from a lost film named Terror from Below made by a trans woman named Betty Palmer Calliope Jackson (voiced by Cassie Workman) who lived in an Australian small town in the 1990s, and later committed suicide.
> realer than you think.
> every one of us is a survivor in a lifeboat on a dark ocean.
In present-day, Sophie Adeline Ophelia Last is a young trans woman who lives in the same town, works at a cinema and spends time with her best friend Spencer Lewi Dawson. Sophie is writing a screenplay based on her experience of coming out to her family when an earthquake hits. Later, she is preparing for her first date since transition. The date, with a cis man named Adam Stanley Browning, appears to be going well until she sees a Grindr notification on his phone labeled "chicks with dicks" and leaves, realising he is a chaser. While Adam walks home stung by Sophie's rejection, he is confronted by a man who encourages his anger and misogyny. A mysterious group of men then dip his head into a vat of green chemicals, from which he emerges smiling.
While drinking at a queer bar with Spencer, Sophie finds a flyer for a local alt-right protest in the bathroom. She also meets Kris Toshiro Glenn, who helps the bar eject his friend Danny Iris Mcerlean after he makes violent and transphobic remarks. Meanwhile, new Australian laws are proposed in which doctors prescribing hormone replacement therapy to children could be charged with child abuse. Cryptessa returns, telling the audience that "a locked door is only locked because someone locked it."
Sophie's brother London Joe Romeo comes to visit her, and the two smoke on her porch. He asks how her transition is going, and gives her an envelope full of cash from their father which she reluctantly accepts. London notes that their father has stopped drinking, and that he himself is "clean" from an unspecified drug addiction which he calls a "monster". "For you," he says, "the monster is on the outside."
Sophie meets Kris again when he sees a film at the cinema she works at, and invites him to happy hour at the queer bar. They also talk about the incident with Danny, who Kris reveals has become radicalised by watching Jordan Peterson and Ben Shapiro videos. When Sophie and Spencer go to happy hour, the bar is mostly deserted due to recent threats of violence against the queer community. Outside, Kris is being assaulted by a group of violent men, including Adam, until Sophie and her friends fight them off. She witnesses the gang hungrily feeding on the human entrails of a victim.
Spencer begins to notice parallels between what is happening around them and the events of Terror from Below. That film tells the story of a parasitic worm taking over the town's men and turning them into zombies, radicalising them into violent misogyny. Sophie watches the film with Spencer and realises it was made as a warning, and that the earthquake has reawakened the ancient worm. She then forms a masked vigilante group with her friends, and they begin executing the local men who have been infected.
Sophie's father drops by to say hello and she thanks him for the money. He is a police officer, and the camera lingers on a badge she is wearing that reads "ACAB" on a trans flag background. He warns her to keep a low profile as recently queers have been going missing, and the police "have (their) hands tied". Cryptessa tells the audience about the warning signs of a slow descent into fascism, and ideas of "the other".
Sophie agrees to meet with Zen Chris Asimos at a cafe, who patronisingly asks her to participate in a film festival he is organising. She Adeline Ophelia Last and her friends then plan to burn down the building in which the zombified men are gathering. Once inside, they are confronted by the men and violently attack them with crowbars, poles and baseball bats before setting their corpses on fire. Kris' neck is bitten by Adam, and he becomes one of the zombies himself as Sophie howls in grief. Once home, Sophie smashes her laptop and tells Spencer she is giving up, saying that Betty Palmer faced the same problems in the 1990s and committed suicide because she was not strong enough. Sophie also feels that life is hopeless as things will continue to get worse for trans people. Spencer talks Sophie around, saying that she is well-loved and that every victory is worth it.
They decide to attend the alt-right "T-Rally" (standing for "traditional values"), figuring this is where the parasite will seek more victims. She witnesses Adam passing the parasite onto another victim and violently executes him with a stake. Having defeated the parasite, she decides to make a film about the experience called Terror from Below 2 to carry on Betty Palmer's legacy and as a warning to future generations.
In the film's epilogue, Cryptessa warns the audience that they may not know who the person sitting next to them really is, and even who they really are themselves. Sophie and her friends return to the bar for a night out on the dance floor. They also drop Zen in a dumpster, telling him not to try to scam anyone again and adding, "Never fuck with queer filmmakers."
