While at his family's lakeside lodge in northern Wisconsin, six-year-old Peter van Cleese witnesses his grandfather mysteriously become overtaken by an apparent supernatural force while listening to a reel-to-reel tape player and fishing on the dock. He falls into the lake, and his body is never recovered.
Seventeen years later, Peter, now a recent college graduate, has inherited the lodge. He decides to travel there with his group of friends—Ann Colbert, Kiersten Knudsen, Rodney, and Tom 'Finner' Finnegan—for the first time since his grandfather's disappearance. The group arrive during "Muskie Madness," an annual fishing festival in the local community. At the lodge, the group are met by Wayne Duerst, a neighbor hired by the Van Cleeses to look after the property since Peter's grandfather's death. Wayne and his paranoid Vietnam veteran son, Evelyn, are hostile toward the group.
While Peter and his friends visit a local restaurant that evening, middle-aged tourist Sheila Swain is attacked on a nearby dock by an assailant who entangles her with a large fishing line and pulls her into the lake. The next day, Rodney and Finner become acquainted with young mother Beverly Duerst — Evelyn's wife — who helps to organize the fishing festival. Rodney visits a local fishing shop run by Leroy Leudke. Leudke tells Rodney a story about how Peter's grandfather and Wayne used to catch trophy fish by reeling them to shore and shooting them but stopped after Wayne accidentally shot Peter with a bullet. Meanwhile, Peter grows increasingly unnerved being near the lake where his grandfather drowned. Ann tries to comfort him and believes him to be experiencing post-traumatic stress disorder.
Rodney takes a boat out on the lake by himself, and is attacked by an unseen assailant, who castrates him with a large fishing hook before dragging him into the water with the fishing line. Police find the blood-soaked empty boat floating on the lake, and Peter insists that Evelyn is responsible. The local sheriff, however, attempts to stymie the investigation to prevent any disruption of the pending festival. A distraught Kiersten decides to relax by floating on the lake, but a large hook is thrown in her direction. Meanwhile, Finner and Beverly spend the afternoon together and become romantic.
That night, while the locals hold a contest to see who has caught the largest muskie, fisherman Roger Swain is stranded on the lake when his boat motor malfunctions. He sounds an emergency horn for help but is gored by a large fishing hook cast at his abdomen and pulled into the lake. Shortly after, Beverly goes for a swim alone and is also attacked with a large hook and dragged beneath the surface. Peter and Ann attempt to locate Kiersten. A ranting and raving Evelyn confronts them, informing them that Bev is also missing. Meanwhile, an intoxicated Finner takes a boat onto the lake, playing music loudly from a boombox. The music, combined with the incessant chirping of cicadas, drives Leudke mad in his nearby bait shop — the sound penetrates through a metal plate in his head, which he had implanted after suffering a brain injury in the Korean War. In a rage, Leudke casts a fishing hook at Finner and tears off his ear. Finner jumps into the water, but is accosted by a raving Leudke, who dismembers him and grinds his limbs up to be used for fishing bait.
A panicked, exhausted Kiersten finally returns to the lodge and tells Peter how she was attacked with a large fishhook and managed to elude it by swimming to the other end of the lake, where she became lost in the woods. Peter, a music major, eventually surmises that the sound of the cicadas combined with certain musical notes can create what is known as the "Devil's tritone," a frequency that has the ability to drive some people insane. Evelyn suggests that the metal plate in Leudke's head could amplify these sounds, which would become overpowering, a phenomenon he witnessed amongst his fellow veterans. Peter and Evelyn investigate Leudke's shack, where they find jars of human organs.
While Peter and Evelyn rush back to the lodge, Ann is attacked by Leudke while sitting alone on a dock playing music, and he manages to capture her and take her back to his bait shop. She tries to reason with him, to no avail, and he locks her in a refrigerator. Wayne teams with Evelyn and Peter to stop Leudke. The next morning at the fishing festival, when Leudke wins the contest, Wayne publicly accuses him of being the murderer, but the sheriff doesn't believe him. That night, Peter faces off with Leudke at his shack, severely injuring him with a treble hook, but Leudke manages to incapacitate Peter. Peter awakens in Leudke's shack and manages to free Ann. Leudke prepares to stab them both to death but flees when he hears police sirens.
At dawn Peter, Ann, and Kiersten leave town. Wayne and the sheriff search the woods for Leudke, but cannot locate him. The sheriff surmises he will likely die of blood loss due to his injury.
