The film is shot as a documentary set in a world where the killers depicted in famous slasher films are historical events. A journalist named Taylor Gentry and her two cameramen, Doug and Todd, document the preparations of Leslie Vernon as he prepares to join the ranks of other slasher villains. Leslie claims to be a boy from a local urban legend who supposedly became possessed and killed his family before being killed by the townsfolk, but having in fact survived the attack. He walks Taylor and her crew through his plans but refuses to truly explain his motives.
Leslie plans to orchestrate a killing spree at his alleged family home, a rundown farm in the woods. At the farm, he plans to slaughter a number of teenagers before being confronted by his chosen virginal "survivor girl", a local seventeen-year-old high school student named Kelly Curtis. In addition to a strict training regime and learning theater techniques to create the proper atmosphere, he has rigged the farm to be in his favor: sealing off exits within the house, mapping the routes his victims will take, rigging the electrical system to fail, and tampering with potential weapons in the barn. Leslie also discusses the bizarre behavior of people in such circumstances, such as herding together without really protecting themselves, tripping on level and stable ground, and attempting to hide in obvious and dangerous locations.
During the documentary shoot, Leslie introduces Taylor and her crew to his mentor, Eugene, who vaguely elaborates on the motives of killers like himself: by acting as evil to counter and even bring out the good within the world. Taylor offhandedly suggests killing the local librarian, Mrs. Collinwood, as a stinger kill in order to draw Kelly in, which he does after Eugene agrees that it's a good idea. However, Leslie's claim to be Leslie Vernon avenging his death is proven false when a psychiatrist, Doc Halloran, interrupts Taylor and her crew, revealing that Leslie is in fact an ordinary, mentally-unstable man named Leslie Mancuso whom Halloran treated in Reno, Nevada. Taylor confronts Leslie about Halloran's allegation and Leslie becomes aggressive with her. Taylor contemplates ending the documentary, but reconciles with Leslie and chooses to continue filming. Taylor and her crew continue to film Leslie's meticulous preparations for his killing spree.
Though Taylor and her crew possess enthusiasm for Leslie's creativity, their consciences catch up with them on the night of the murders. They beg Leslie to call off his killing spree, but Leslie is adamant, believing that his survivor girl will define herself by facing him. He implores and invites the crew to leave but they ultimately decide to stop Leslie. At this point, the film's mise-en-scène shifts from documentary mode to a standard horror film presentation. Taylor attempts to warn and rally the remaining teens together to fight Leslie, attempting to use the knowledge they have against Leslie, but Leslie's preparations appear to have expected the crew remaining. The group looks to Kelly - who is revealed to not be a virgin - for leadership, but she unexpectedly dies when trying to escape. Taylor struggles to keep the teenagers from bumbling through Leslie's preordained schedule, with Todd sacrificing himself by drawing Leslie away from the house, one of the few disruptions that Leslie mentioned as being potentially ruinous to his plan.
Taylor quickly realizes that, as a virgin herself, she was Leslie's intended survivor girl all along. Leslie continues picking off the group one-by-one until only Taylor remains. She faces Leslie and defeats him in the exact manner he had laid out for her, crushing Leslie's head in the apple press, then burns down the shed in which he was defeated, apparently killing him. Outside, she finds Doug and Doc Halloran, who have both survived their encounters with Leslie.
Over the final credits, security camera footage reveals Leslie's charred body sitting up on an autopsy table, still alive.
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