GHOULIES

Malcolm Graves, the leader of a satanic cult, is about to sacrifice his child Jonathan when his mother, Anastasia, places a protective talisman around Jonathan's neck. Malcolm orders a participant named Wolfgang to take the child away, and sacrifices her instead. Twenty-five years later, an adult Jonathan and his girlfriend Rebecca inherit his late father's estate, where they find several books on magic and a basement full of occult paraphernalia. They throw a party. Jonathan recruits his friends to perform a ritual in the basement for fun. When he begins conducting the ritual, Jonathan abruptly becomes short-tempered. Everyone leaves when the ritual fails, but a small creature materializes in the basement.

The next day, Jonathan tells Rebecca he is quitting college to work on the estate. She expresses concern, which grows when Jonathan refuses to eat, explaining that he is fasting. He conjures several creatures called Ghoulies, and proclaims himself their master, demanding they hide their existence from everyone but him. One day, Rebecca comes home to find Jonathan in the basement wearing a dripping wet robe. He explains that he was trying to learn about the parents which he never knew, and promises to stop his behavior. He gives her the protective talisman as a gift, urging her to never take it off. While they are having sex, a Ghoulie draws an occult diagram under the bed which prompts Jonathan to chant in another language. A furious Rebecca leaves him.

Jonathan summons two dwarfs named Grizzel and Greedigut to his service, who promise to give him everything he desires. They explain that he must perform a dangerous ritual with seven other people to obtain the knowledge and power he seeks. Rebecca returns and asks Jonathan to leave with her, but he refuses and reveals he has green eyes. In a pique of anger, she tears off the talisman, unwittingly enabling Jonathan to hypnotize her, forcing her to do his bidding. He invites his friends and bewitches them to participate in the ritual. As Jonathan, Rebecca, their friends, Grizzel, and Greedigut all chant, Malcolm is resurrected from the grave. Oblivious to this, Jonathan invites his friends to stay the night.

Malcolm proclaims himself the real master to the Ghoulies and dwarfs, and commands them to kill Jonathan's friends. Meanwhile, Jonathan apologizes to Rebecca and breaks the spell by placing the talisman around her neck, but she falls into a deep sleep. She wakes up to see Jonathan in a trance, and runs away. After she removes the talisman around her neck, Jonathan and the Ghoulies attack her and she is magically shoved down a flight of stairs to her death. Jonathan brings her to the basement to resurrect her, where he finds the dead bodies of his friends underneath sheets.

Malcolm appears with the dwarfs, revealing that he used Jonathan to resurrect him in order to capture his youth and sacrifice him. He also admits that it was he who killed Rebecca, not Jonathan. Malcolm resurrects Rebecca to distract Jonathan, but the dwarfs alert him of the trap. Wolfgang appears and fights Malcolm with his own magical powers. The house begins to crumble, and Wolfgang defeats Malcolm before they both disappear. Jonathan's friends are resurrected, and they drive away as Grizzel and Greedigut wave farewell. Mike asks what is happening. Jonathan assures him it is over, but Mike is unconvinced after he sees the Ghoulies in the car with them.

In the climax, Malcolm is resurrected and attempts to use Jonathan to regain youth and perform a sacrifice, while the Ghoulies and summoned servants turn deadly. The resolution involves confrontations between Jonathan, Rebecca, Malcolm, and the Ghoulies, culminating in supernatural showdowns in the mansion.

The ending brings the film's supernatural threads together, as the rituals and meddling with occult forces reach their chaotic peak. Malcolm's resurrection and bid for power reveal the generational consequences of dark magic, while Jonathan and Rebecca's fates become intertwined with the mansion's sinister legacy. The film closes with supernatural forces ultimately consuming those who sought to control them, underlining the perils of tampering with the unknown.