NOTE: First time spoiler Melissa sends this in.
Kale (Shia LaBeouf) is on a fishing trip with his father. Kale drives on the way home as Kale’s dad calls Kale's mom Julie (Carrie-Ann Moss). Kale gets into a car wreck and his dad is killed. His mom Julie hears the whole thing on the cell phone.
A year later Kale is in Spanish Class. A teacher, Mr. Gutierrez is harassing him in front of the entire class for sleeping and not studying. Mr. Gutierrez walks up to Kale and says, "What would your father say?" Kale slugs him in front of the entire class.
We next see Kale with his mom in court. The judge orders him to 3 months of house arrest despite the fact Kale is only 3 months shy of 18 and the sentence could be worse.
Later that day we see Kale, his mom and Kale's probation officer in Kale's kitchen. They are attaching his anklet bracelet and explaining there is no way to trick it or remove it so don't try. They also explain that if Kale gets more than 100 feet from the sensor box in the kitchen, the police will show up and Kale will end up in Juvenile Hall.
Over the next few days, Kale's Mom cancels his Xbox Live, Internet, I-tunes and cuts the cord to the TV in his room. Out of boredom he starts watching his neighbors with binoculars. A couple neighbor kids light a bag of flaming dog pooh on his porch and he chases after them, not realizing he had run too far from the sensor box. The police show up. The office that shows up is the cousin of Mr. Gutierrez, the teacher he hit. The cop arrests Kale on his lawn in front of the new family moving in next door. Kale sees that the neighbors have a beautiful daughter that's his age and he is embarrassed.
All through the movie you see news reports on the TV in the background that the police are seeking a murderer who drives a 60's era mustang with a dented side. The murderer was from Texas and had several bodies stuffed in the walls and basement of his home. This murderer was a suspect for the kidnapping of a missing woman.
Kale involves the pretty new neighbor girl, Ashley (Sarah Roemes) and his best friend Ronnie (Aaron Yoo) in staking out his neighbor, Mr. Turner (David Morse), who Kale believes is the murderer the cops are looking for. Turner has a 60's era Mustang, he has a long horn skull in his garage and was seen toting a mystery bag which was leaking "red smears" into his garage, not to mention he had made changes to his house building a room which connected his house and garage.
The three new friends stalk Turner, follow him while he shops, break into his car and then his garage but turn up no hard evidence.
Turner is obviously annoyed and makes idle threats. He helps Kale's mom carry in groceries and invites her to dinner. He gets into Ashley's car while she follows him and warns her politely that he likes his privacy and taunts Kale subtly.
Kale convinces Ronnie to take a video camera and go into Turner's house to retrieve a cell phone that Ronnie dropped while breaking into Turner's car. Ronnie gets spooked and runs through Turner's house. While Ronnie is running, the live video feed that Kale was watching is lost and he assumes Turner has killed his friend. Kale runs to Turner's house again, alerting the police and again the teachers cousin shows up. The cops search Turner's house and find only that the black mystery bag contained the rotting corpse of a deer.
Kale is told by his probation officer that he will have to appear in court the next morning and that if Turner presses charges Kale will go to jail. Kale goes to his room and finds that his friend Ronnie was there hiding and had never actually been hurt.
Kale's mom goes over to Turner's house to try to talk him into not pressing charges against Kale. Kale and Ronnie watch the video of Ronnie running through Turner's house when Kale notices that on the video while Ronnie was hiding you can clearly see a dead woman stuffed in a heater vent in the wall.
Fearing for his mothers life Kale gets up to go get her from Turner's house when we realize that Turner who is now standing in Kale’s room has knocked out Kale’s mom. Turner hits Ronnie with a lead pipe and is going after Kale. Turner explains that he is going to make it appear as if Kale killed Ronnie and his mother, making Kale's father’s death and cabin fever appear to be the motive.
Kale escapes and makes his way over to Turner's house. The ankle bracelet has notified police but the teacher's cousin is on his lunch break and tells the dispatcher he will get over to check on Kale when he's done eating.
While trying to find his mother in Turner's house, Kale finds a water pit full of dead bodies and dead people stuffed in the walls. Kale finally finds his mom tied to a wall and sets her free.
Meanwhile Officer Gutierrez finally shows up and is killed by Turner.
A fight entails and Kale’s mother stabs Turner in the leg and Kale impales him with garden shears and throws Turner into the pit of bodies where he appears to be dead.
The next day the probation officer comes to Kale's house and removes his ankle bracelet early for what she calls "good behavior".
In the final scene you see Ronnie (who is still alive but injured), Ashley and Kale getting revenge on the little neighbor boys who put flaming dog pooh on his door step. Kale calls the boys mother claiming to be from the cable company and tells her that she has adult (porn) programming going to receiver 3 in her house, she runs to her sons room to find a bunch of 10 years old boys watching porn. Kale tells Ashley that this was just the first strike in protecting the neighborhood.