Set roughly twenty years after the events of its predecessor, the film opens with Karl Berger, Jr., son of the previous film's antagonist, using a machete to kill the sole survivor of a drug deal gone wrong. The film then switches to Hamburg reporter Paul Glas, who is meeting with an informant known as "Mr. X" to discuss a series of recent murders Glas believes are connected to the killing spree Karl, Sr. went on two decades ago. After showing Glas top secret photographs of several victims, Mr. X tells the reporter everything the authorities know about the murders.
Switching to two years ago, Karl, Jr. is shown being given a machete as a birthday present by his adoptive mother, a decrepit old woman and Karl, Sr.'s lover, who discovered and buried the original Karl's remains, and took in the son he gave birth to, intent on raising him to be the ultimate killing machine in order to avenge his father's death. Sent out to fulfill his destiny, Karl attacks a quintet of campers, killing two and taking the other three back home, where he mutilates and tortures them to death for the amusement of his mother, who drinks the victims' blood and allows her son to perform cunnilingus on her as a reward for his good work. Embarking on a homicidal rampage, and occasionally returning home to rest and be told perverted bedtime stories by his mother, Karl murders a pair of fishermen, a group of construction workers, a jogger, and a young couple. Karl's spree culminates in him breaking into a pornographic theatre, where he guns down the manager and over a dozen patrons. Upon returning home after this mass shooting, Karl discovers his mother has been decapitated, her severed head informing him "your father's back" before expiring.
In the present day, Mr. X tells Glas that the police eventually discovered the killer's cabin, which had an old woman's head and at least fifteen dismembered bodies in it. When asked by Glas if the man responsible was ever caught, Mr. X says no, and bids Glas goodbye, reminding him that he absolutely must not publish the pictures he had given him. Leaving shortly after Mr. X does, Glas rips up the photographs, deeming the story he has been told too twisted to tell the public.
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