Picking up from the previous events with a flashback sequence, Jason (Richard Brooker) has seemingly survived his attack from Paul and Ginny, and migrates to a store where he changes clothes and then murders the store owners, the henpecked Harold (Steve Susskind) with a meat cleaver into his chest and his shrewd wife Edna (Cheri Maugans) with a knitting needle through the back of her head, before moving on to a nearby lake front property named Higgins Haven.
At the same time, 18-year-old Chris Higgins (Dana Kimmell), who was attacked by a mysterious, disfigured stranger in the woods near Crystal Lake two years earlier, returns to the property with her friends; Debbie (Tracie Savage), her boyfriend Andy (Jeffrey Rogers), dim-witted prankster Shelly (Larry Zimmer), Vera (Catherine Parks), and stoners Chuck (David Katims) and Chilli (Rachel Howard). After meeting Abel, an inebriated, religious fanatic derleict who warns them to turn back, the gang meets Chris' boyfriend Rick (Paul Kratka) at their destination; Higgins Haven. Chris intends to face her fears; however, none of her friends know that an unmasked and reclusive Jason has taken refuge in the barn to recover from his wounds.
Meanwhile, Shelly and Vera go shopping at a local supermarket to get food and supplies when they get into trouble with a three-person biker gang, called the Black Widows, led by a brutal woman named Fox (Gloria Charles). When Shelly accidently knocks over their motorcycles outside the store, Fox and her two minions Ali (Nick Savage) and Loco (Kevin O'Brien) follow Shelly and Vera back to Higgin's Haven for revenge. However, they are dealt with by Jason before they can do any real damage except for taking the gas out of the gang's van. While looking around the barn in fascination, Fox is murdered with a pitchfork to her neck. Loco looks for her and gets impaled with a pitchfork. Ali is next when he enters the barn and finds the two's corpses. He attacks the unseen Jason, but gets bludgeoned with a 10" pipe wrench.
At nightfall, Jason continues lurking around the barn while spying on the kids who settle down for a party at the nearby cabin. When Chris and Rick go for a walk in the woods, Jason wanders out of the barn to cause more harm again. At first, Jason only harasses them from a distance. When Chuck goes to an outhouse to take a dump and smoke more pot, Jason walks past and bangs on the walls of the outhouse before retreating.
Later, Shelly, wearing a wet-suit and a Red Wings hockey mask plans another scare prank against Vera who is siting on a pier beside Higgens Lake. After Vera angrily tells Shelly to go off, he wonders into the barn where Jason slits his throat and takes his hockey mask, now concealing his deformity. Taking the spear-gun that Shelly had with him, Jason (fully masked) walks out of the barn and sees Vera wading out in the shallow water to get Shelly's wallet after she accidently drops it in the water. Thinking it's Shelly, Jason shoots Vera right in her left eye, killing her as her body falls in the water, and having Jason to discard the spear-gun.
With Vera killed, Jason finally sneaks into the house, where he continues onward with his killing spree. After Andy and Debbie have sex, she goes to the bathroom for a shower, but gets surprised by Andy, who is walking on his hands. Jason sneaks up to him and horizontally murders him with a machete. Debbie leaves the shower and rests in her hammock in her bedroom, where she soon discovers Andy's horizontally-spitted body hanging from an overhead plank and gets stabbed through the hammock with a kitchen knife. Next, Jason disables the power to the cabin by tampering with a fuse box. When Chuck goes to the basement to fix it, Jason approaches him and shoves his face on the circuit panel, electrocuting him. At the same time, Shelly, whom is still alive and having his neck still slit, stumbles into the cabin before dying where Chilli finds him, but she is quickly attacked and killed by Jason who shoves a hot fireplace poker through her stomach.
When Chris and Rick return they find the place empty, where they split up to find out what's going on. Rick, outside is attacked by Jason who kills him by crushing his head, which one of his eyes pops out.
After finding the corpse of Loco, Jason then confronts Chris with an felling axe, and a climatic chase ensues with the two of them exchanging attacks with Chris trying to keep away from the masked murderer. During the process, she slows him down by dumping a bookshelf over him, then stabs him in his left leg with the same knife used to kill Debbie (Just before Jason throws it at a wall, which nearly hits Chris), and then bashes him with a fireplace log. Chris tries to escape in the van and almost hits Jason, but it soon runs out of gas (due to the biker gang's vandalism), forcing her to run back to the barn to hide.
Jason enters the barn and arms himself with a machete and confronts Chris on the barn's rafter, but she manages to subdue him by bashing him on his head with a shovel. She seemly defeats Jason by tying him to a rope and hanging him to make sure that he is dead. Jason survives the hanging and briefly shows his real disfigured face to Chris while trying to get the noose off his neck, which she recognizes him as the man who attacked her two years ago. As Jason precedes to attack Chris with his machete, one of the bikers, Ali (who seemingly survived his attack), attempts his revenge on Jason, but Jason severs his right hand and hacks him to his demise. While Jason is hacking up Ali, Chris picks up an felling axe and slams it down to Jason's skull, causing him to stagger and fall over, seemingly killing him. Chris then wanders over to the lake and falls asleep in a canoe that drifts into the middle of the lake.
The next morning, she wakes up in the canoe, when suddenly she sees Jason (now unmasked and bloody from the axe cut) appearing from an upper window, causing him to run outside to the lake to attack, but sees that it was just a part of her imagination. Reliving, suddenly she gets pulled into the water by a decaying Mrs. Voorhees (Whom has her head still intact).
It is revealed that it was just a disturbed nightmare and at some point later, the police take Chris (Mentally disturbed from the events) off the property into the police car as they drive off. The film ends with Jason's deceased corpse, still with the axe intact in his head and showing the lake in peace once again.