Inside an old abandoned building, four children are playing a game in which they all hide while one of them looks for the others, calling out "the killer is coming!" Young Kim and her two twin siblings, Alex and Robin, walk by and see the children playing. Kim and Alex leave, but Robin lingers, hoping to join the game. But upon entering the building, the four kids gang up on her, chanting "kill!" until Robin has nowhere to go. Backing up into a window, Robin crashes through and falls out of a second floor to her death below. One of the kids, Nick, wants to get help, but Wendy convinces all of them that the best thing to do is tell no one and never tell anyone about what happened. Wendy, Nick, Jude, and Kelly swear to keep quiet. As they leave the building and ride away on their bicycles, an unseen person sees them ride off. Later that evening, Robin's father, Mr. Hammond (Leslie Nielsen) and the police are at the scene. They have surmised that Robin was the victim of a sexual attack by a homicidal maniac. They think they know who is responsible and the cops go off to question a suspect.
Six years later. The now grown-up Kim (Jamie Lee Curtis) and Alex (Michael Tough) are visiting their sister's grave with their parents. A little later, an unseen person with a creaky voice is telephoning each member of the guilty party one by one telling them, "I'll see you at the prom!" The timid Kelly is upset, while Jude and Wendy think that it's a prank.
Meanwhile, police detective McBride (George Touliatos) is unsettled because a psycho killer named Leonard Murch has escaped from a local clinic hospital. Murch was a known sex offender who the police suspected was responsible for Robin's death. That night when McBride and his men approached Murch for questioning, he fled and after a car cash, wrecked his car and suffered horrible burns all over his body. Murch has been residing in the asylum for the criminal insane and he just escaped and may be heading back to the town where it happened to look for more victims. When the police discover the dead body of a nurse that Murch took as a hostage during his escape from the hospital, McBride and the asylum psychiatrist Dr. Fairchild believe that Murch may have returned to the town for revenge against everyone.
In town, it is revealed that Nick is Kim's latest boyfriend. Wendy is Nick's ex-girlfriend, and she is certainly not happy that the new couple are going to their senior prom together. Wendy tries to assure Kim that the relationship will not last by telling her "It's not who you go with. It's who takes you home". Later, the school bully and misfit Lou (David Mucci), is messing with Kim in the cafeteria wearing a hood. Alex steps in to defend his sister, and he holds his own against Lou's two pals until Lou sucker punches him in the back. Brought before the principal, whom is Mr. Hammond, he suspends Lou for fighting. As Lou leaves the school grounds, Wendy tries to talk to him. When Nick and Kim are walking around, Nick tries to tell her about that fateful day, but is he not able to.
Meanwhile, Wendy makes devious plans to break up Kim and Nick, and she tells Lou that she doesn't want anyone hurt. Lou tells her that he will take care of it. Nearby, Jude is picked up for a ride home by Slick, an outcast student who drives a Chevy van, whom he asks her to the prom and she accepts. In the girls locker room after tennis practice, Wendy finds her school photograph torn from the yearbook and hanging on the front of her locker. When Kim and her friend, Kelly, are alone, they hear a loud noise in the locker room and they see that a mirror has been smashed. After checking around the locker room, the return to see that a fragment of the mirror is gone. Jude and Kelly both find their yearbook photographs inside their lockers, as does Nick.
That night, Lou picks up Wendy to take her to the prom. Mr. Hammond is the chaperone and Alex is the DJ for the disco music. Everyone is having a good time dancing and listening to the music and watch Kim and Nick do their well-choreographed dance on the dance floor before everyone. McBride secretly arrives at the dance to oversee it and to make sure that nothing bad happens.
Kelly and her boyfriend, Drew, leave the gymnasium for a part of the school where they begin to make out. Kelly decides that she cannot go any further, and an irate Drew goes elsewhere telling Kelly that he knows "plenty who will". After Drew walks out on Kelly, a man wearing all black clothing with a hood over his head, quickly approaches the tearful Kelly and kills her by slashing her neck with a long and jagged mirror shard.
Jude and Slick decide to sneak out of the festivities in the gym for some intimate time as well. Outside, Jude and Slick are in the back of his van enjoying the privacy. After spending a bit of time outside the van, they hear noises and thinking that someone is nearby spying on them, go back inside the vehicle to smoke some marijuana. After a minute, the back doors fling open and the hooded killer stabs Jude in the neck with the mirror shard. The murderer then leaps in after Slick who fights back and pushes the killer out of his van and starts it up to run the killer over. But the killer leaps out of the way and grabs onto Slick as he is trying to drive away. After wildly spinning around, the killer jumps free and the van goes over a cliff and explodes into flames with Slick still inside.
The killer returns to the school and follows Wendy out of the gym to the ladies room where she is putting on makeup. The lights are turned off and the killer, now armed with an axe, swings it at her head. Wendy gets away and a long chase through the school begins as Wendy tries to outrun her axe-wielding pursuer. The chase leads through the darkened halls, classrooms, and the workshop area. Wendy almost gets away, but in due time the killer finds her when she screams after finding Kelly's dead body in a linen closet and she is axed to death.
Back inside the prom, McBride is told by another police officer that Murch has been caught and was several miles away from the town. When McBride leaves, Kim begins looking for her father, but cannot find him as he is to announce the new prom king and queen. So, a teacher decides to announce the winners himself. Backstage, Nick and Kim ready themselves for the announcement of prom king and queen when Nick is accosted by Lou's thugs and Lou takes his place backstage with the crown. The killer, believing Lou to be Nick-in-waiting, sneaks up to him from behind and uses the axe to chop off Lou's head, which rolls down the catwalk for the entire student body to see. The students scream and flee the gymnasium. But the killer is knocked out when he accidentally hits the ropes supporting the sandbag counterweights for the stage curtain. Kim finds Nick and frees him and tries to help him get out of the building. The killer revives and, quickly realizing his mistake, blocks the exit and attacks Nick and Kim. The killer seems only wanting to kill Nick and cares little about Kim whom is trying to stop him. Kim manages to get the axe away from the killer who, deprived of his weapon, attempts to choke Nick. Kim swings the axe at the killer, hitting him in the shoulder. When the masked killer reacts to his injury and yells out, Kim pauses for a moment and looks at the killer's eyes and sees familiar looking eyes staring right back at her which makes her drop the axe.
The killer stumbles away and outside where McBride returns with the police who have surrounded the place. As they take aim, Kim runs outside and yells "don't shoot him!" Kim runs to the killer's side who collapses. She removes his hook to reveal..... her brother Alex. Using the mask to gauge his wound, Kim holds Alex who tells her that Nick and his friends were the ones who killed Robin. As Alex dies from his wound, Nick walks outside and stares at a tearful Kim as she continues holding her dead brother.