In Kuwait, a military unit uncovers an American helicopter that went down due to friendly fire. As the wreckage is searched, Master Sergeant Sam Harper [David 'Shark' Fralick] springs to life from the burnt remains, murdering a sergeant and a major. He finally dies again, whispering a haunting line: "Don't be afraid, it's only friendly fire!"
When Sam’s body is delivered home to Twin Rivers, the town is buzzing with Independence Day preparations. Sam’s widow Louise [Anne Tremko] takes custody of the casket, which ends up at the home of Sam’s estranged sister Sally [Leslie Neale], who lives with her patriotic young son Jody [Christopher Ogden]. At dawn on the Fourth of July, Sam reanimates as a revenant and steals the costume of a deranged Uncle Sam, turning a symbol of national pride into something monstrous. He makes his way to the cemetery, where he murders two of three juvenile delinquents who had vandalized tombstones and desecrated an American flag, marking a grim prelude to the celebrations.
During the Independence Day festivities, a visiting corrupt congressman, Alvin Cummings [Robert Forster], becomes an unintended target in Sam’s rampage. Sam also takes aim at the town’s fragile veneer of civility: he beheads the third delinquent (who had sung the National Anthem in a juvenile performance at the start of the festival), kills Jody’s teacher with a hatchet, and shoots Sally’s unscrupulous lawyer boyfriend Ralph [Tim Grimm] in the head. A teenage girl running a BBQ stand is burned by the grill after discovering the severed head on the barbecue, a brutal reminder that the holiday cheer has been hijacked by a malevolent force.
Even as chaos erupts, the town carries on with the parade and fireworks—until Sam seizes the fireworks gear to blow up Cummings and uses an American flag to impale Louise’s deputy boyfriend Phil Burke [Matthew Flint]. As the body count climbs, Jody learns from his mother and his aunt that Sam was not the heroic idol he seemed to be. He was an alcoholic with a history of abuse, who joined the military to satisfy a compulsion to kill, not to serve his country.
Barry Cronin [Zachary McLemore], a blind boy who has formed a psychic link with Sam, helps reveal the truth to Jody. With help from Sam’s old mentor Jed Crowley [Isaac Hayes], the group uncovers the grim reality behind Sam’s “glorious” battles. They confront the terrifying truth at Jody’s home, where Sam’s former kindred spirit, the lecherous sergeant Twinning [Bo Hopkins], lies dead and stuffed inside Sam’s coffin.
In a final confrontation, Sam charges at Louise, blaming Jed for feeding him tales of glory. Jed counters by explaining that Sam killed not for country but for the thrill of killing. As Jed’s cannon roars, Sam is blasted away; the explosion also devastates Louise’s house. The next day, Sally grins with relief that Jody no longer idolizes Sam. She watches as Jody burns all of his war toys, finally rejecting the violent fantasy that had haunted his childhood. The town begins to face the aftermath, trying to reclaim the holiday from a nightmare that began in the past but ended with the truth.
