Grace Rhodes, played by actress Naomi Watts, is a medical student who returns home to Grand Island, Nebraska, to help contain a mysterious epidemic that is spreading among the local children. The illness causes a high fever and strange spasms, and the infected children all claim to be someone else the following day, with a new personality and mannerisms.
As the epidemic continues to spread, the children begin to murder the adults in the town, leaving a trail of blood and terror in their wake. Grace's younger sister Margaret, played by actress Karen Black, also becomes infected, and Grace becomes increasingly desperate to find a cure before it's too late.
As she investigates the origins of the illness, Grace discovers that there may be a connection to a local legend about a charismatic preacher named Josiah, who was executed for leading a cult that sacrificed children. She learns that Josiah's body was buried in an unmarked grave on the outskirts of town and is believed to be cursed, leading her to believe that he may be returning from the dead to exact revenge on the town.
With the help of her boyfriend, a local cop, and a young boy who seems to have a connection to the cult, Grace races against time to uncover the truth and save the town from the evil that threatens to consume it. But as the bodies pile up and the town descends into chaos, Grace realizes that the only way to stop the children is to confront the demon that is possessing them and put an end to its reign of terror.