Kristi (Sprague Grayden) and Daniel (Brian Boland) are painting their nursery in anticipation of the arrival of their first son, Hunter. Kristi’s sister, Katie (Katie Featherston), arrives to congratulate them and asks if she can drop off a few boxes she was left by their grandmother when she passed away. She leaves them boxes full of VHS tapes that were filmed when they were children. As she leaves, Daniel teases her about her relationship with her boyfriend Micah since they are moving in together.
A year later:
The house is a mess and Daniel is trying to document all the damage and any items that might have been stolen and goes down into the basement. While in the basement, the only thing he notices to be missing is the box of tapes that Katie left them.
1988. It’s Katie’s birthday, and there’s a party. Dennis (Christopher Nicholas Smith), the camera man, is a wedding videographer and has been dating Katie and Kristi’s mom, Julie (Lauren Bittner), for the last few months. He records Kristi talking to herself by a little soccer net that they have set up, and he asks Julie to bring her over so that they can sing happy birthday to Katie. Kristi continues talking to her imaginary friend, “Toby” despite the insistence of her mother to play with the other children. Dennis films a video entry from each family member. Julie shows off Katie’s cake while Julie’s mother tells Katie that when she was born she laughed and cried. Dennis films himself thanking Katie for being so welcoming and despite the fact that he isn’t her father, he loves her very much.
That night, Julie rolls a joint and Dennis decides it will be fun to record it. Despite the fact she wants to keep her kids from seeing it, Dennis convinces her to let him keep the camera on. Eventually, he convinces her that they should make a sex tape. However, at that moment an earthquake occurs and the couple runs to find the girls. Dust falls around the bedroom and outlines around the shape of something in front of the bed. It is there for a minute before the dust collapses. The outline gone.
The next morning, Dennis is going over the footage and asks Julie to confirm what he’s just seen. She asks him to delete the video, but he tells her that he needs to document this because he’s certain that something was there. He recruits his friend Randy (Dustin Ingram), a tech expert, to help him set up cameras around the house to catch whatever is happening.
It’s picture day. Kristi and Katie get all dressed up while Julie and Dennis take pictures. Once Julie takes the kids off to get their photographs taken, Dennis is alone in the house and hears a noise. He follows it around and ends up in the girls’ bedroom where a small robotic bear has fallen down. He notices that a small crawl space/cupboard has been opened and looks inside. It’s empty aside from a few of Kristi’s things, but when he turns around Kristi is standing right behind him. He’s shocked that she was able to sneak up on him like that and jokes around a bit.
That night, Dennis sets up a camera in both bedrooms to catch some activity. Kristi wakes up in the middle of the night and walks towards the cupboard, which can be heard creaking open. She starts talking about Dennis describing him as “Nice.” The next morning Dennis asks her about the conversation, and she tells him that what she and Toby talk about is secret because she wants to stay safe. Dennis asks if Toby is threatening her, but she just says that she just wants to stay safe.
Randy checks out a few books on entities and demons so that he and Dennis know what they are dealing with. Randy discovers that witches' covens would make deals with demons and use young girls as the vessels through which young boys would be born. The children would then be brainwashed in order to do the demon’s bidding. Dennis laughs this idea off and sets to work converting a fan into an oscillating camera stand. They find a photograph of a coven from the 1930s, each with a distinct insignia of an upside down triangle within a circle.
Julie’s mother expresses her disapproval of Dennis to Julie, citing his lack of affluence and wealth as a major area of concern as she wants her daughter to be financially secure. She asks Julie if she’ll ever have another child but Julie says she’s fine with two beautiful girls. Julie’s mother reminds her that she always wanted to have a large family and shouldn’t stop until she has a son.
Dennis goes to check out a noise he heard. Randy hears it as well, and they end up in front of Dennis’ closet. Dennis opens it, and out jumps Julie, wearing a witch mask. Dennis freaks out and has to sit down to calm himself while Randy and Julie laugh uncontrollably.
The girls are sleeping outside in a tent. Julie hears noises going on in the girls' bedroom so she assumes that the girls came back into the house. Dennis goes to check on them, but Julie then starts hearing noises from her bathroom. She starts walking towards the bathroom and the door to her bedroom starts to close slowly until it bursts open Dennis can’t find the girls in their room. They go down and try to get to the girls outside, but the door is locked. They unlock it and bring the girls inside.
More footage shows Kristi going on night excursions with Toby and talking. During a tea party, Dennis sits down with Kristi and Toby. Kristi moves her cup and accidentally touches Toby and quickly apologizes. Dennis asks why she is apologizing and Kristi explains that Toby doesn’t like being touched. Dennis mockingly apologizes for her, explaining that it was an accident. He leaves the camera to record more of Kristi and Toby talking. Katie returns and starts making fun of Kristi calling her a baby. She goes into the cupboard, which Kristi says is Toby’s room, and the demon slams the door shut and refuses to let Katie out. Katie starts screaming, but Kristi just says, “I told you not to go in there.” Julie arrives and Katie bursts out of the cupboard screaming that Kristi locked her in. When Dennis goes to investigate the cupboard he finds the insignia of the witches' coven scrawled on the wall.
Julie and Dennis decide to go out for the night and hire a babysitter to look after the girls. She plays around with them and jumps in front of the camera in the kitchen to scare Dennis before dressing up like a ghost and fooling around with the girls. After the girls are in bed, she goes downstairs to study. Someone comes downstairs with a blanket draped over themselves and stands behind the babysitter creepily. Before she turns around, the blanket collapses, empty. She is confused and brings the blanket upstairs when the demon blows on her and scares her so that she stays downstairs the rest of the night. When the couple returns, the babysitter leaves immediately, obviously scared. When Dennis and Randy observe the tapes, they freak out.
Julie wakes up for a midnight snack. She tosses the remnants into the garbage disposal but drops a spoon into the disposal unit. The light in the next room turns on by itself as Julie sticks her hand into the disposal unit and suddenly screams. The light has fallen with a crash and startled her. Dennis goes upstairs to investigate, but the girls are both asleep. A few hours later, Kristi wakes up and tells Toby that she doesn’t want to do what he says and tells him to go away.
Kristi wakes up the next morning and is incredibly sick. Dennis and Julie take her to the hospital and Katie is left with Randy to look after her. She bullies him into playing Bloody Mary with her, and they do it twice. The second time, the demon scratches Randy across the stomach and begins overtly terrorizing them as it blurs outside the door, slamming at them and scaring them. Randy opens the door and has furniture thrown at them. He grabs Katie, and they run. When Dennis returns home, Randy packs up all his equipment and leaves because it’s too much for him.
Kristi and Katie wake up, and their Lite Bright is displaying the sign of the witches’ coven. Dennis is editing together wedding tapes while Julie is asleep in bed. Katie’s bed sheets start moving, slowly growing in size over her until they fall down. Suddenly, the cover is thrown at the camera, and Katie is dragged across the room several times while she screams for Kristi to help her. Kristi screams at the demon to let her go, but it throws the bed around. Katie is dragged back into the cupboard until Kristi agrees to do what the demon asks.
The next morning, the girls beg their mother to take them to their grandmother’s house to get away from Toby. Their mother won’t hear about it and starts yelling at Dennis for filling their heads with this demon nonsense. He tells her to look at the tapes, but she refuses. Katie is running after Kristi when she hits an invisible wall: Toby. Toby grabs her by the hair and yanks her off the ground, throwing her. Katie comes to her mother screaming that Toby pulled her hair and Julie tells Dennis that the experiment is over. However, she walks into the Kitchen and sees it’s empty. Suddenly, all the utensils and furniture fall from the ceiling, scaring Julie out of the room.
Dennis, Julie and the girls drive to Julie’s mother’s house. They eat apple pie when they arrive and Dennis sees Kristi fingering one of the paintings in the dining room. He tells her not to touch it because it might be expensive. As Kristi and Katie play outside, Dennis films Julie talking to her mother about what is happening. Kristi and Julie’s mother play dress up, and Kristi puts on a wedding dress. When Dennis asks her who the lucky groom is, Kristi replies “Toby.” This freaks Dennis and Julie out, and they put the girls to bed early.
A car pulls up around 2 am, and Julie goes to see who it is. When she doesn’t return, Dennis goes to find her. Julie’s mother appears behind him for a moment, but he doesn’t notice. He searches the house but can’t find anyone. He goes out to the garage and finds a group of older women standing in a circle. He freaks out, running back into the main house and locking the door behind him.
He runs around the house calling for the girls and finds Julie at the top of the stairs. Something is odd though as her expression is blank and she appears taller. He runs upstairs and sees that she is levitating before she is thrown at him at full force and they fall down the stairs together. Julie is dead, and Dennis hears whimpering Kristi is in the dining room. He sees the paintings removed and coven symbols everywhere. He grabs Kristi and they run, as the demon starts attacking them. They hide in the closet for a few moments before Dennis tells her that they need to find Katie. They run through the house as things are thrown about them. They see Katie by the steps crying over the body of Julie. Dennis tells Kristi to stay by the wall when he goes over. Katie turns around possessed and throws him across the room, breaking both of his legs. When he starts to crawl back into view the demon grabs him by his arms and legs and breaks his spine, contorting his body into unnatural shapes before letting him go. Julie’s mother walks into the room holding Katie’s hand and takes her and Kristi to “get ready.”
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