The story begins in 1961 with a doctor arriving at a foreboding house on a dark and stormy night. The patient is Dorothy Slater (Lois Kelso Hunt) who has gone into labor. There are complications, however, and the doctor is forced to perform a c-section. When Mrs. Slater wakes up, she asks to see the baby. The doctor can only say, "I'm sorry, Mrs. Slater" as Mrs. Slater sceams out "No!".
Cut to 1983, at the Theta Pi sorority, where the girls are packing up after graduation. We meet Katey Rose (McNeil) as she discusses her post-graduation plans with her mother. Vicki (Davidson) interrupts and asks Katey to stay for a big going away party at the house. Katey agrees with a little more goading. Meanwhile, Mrs. Slater has a hushed discussion with Dr. Beck (Christopher Lawrence), the doctor who came to see her that night. It seems she's still having trouble dealing with that night. Beck begs her to stay at the hospital, but she refuses. She wants to stay at her house (the sorority house) by herself for the summer. She threatens to expose "what he did that night" if he tries to stop her. He gives her a medical alert bracelet and lets her go. Back at the house, the girls are all getting drunk and talking about boys and their future plans. Mrs. Slater comes home and catches them. She tells them all to get out by tomorrow morning. Depressed, she heads up to the toy-filled attic as the girls discuss why the house always closes on June 19th instead while every other sorority/frat house stays open on graduation weekend. Diane (Kozak) proposes a sarcastic toast to Mrs. Slater.
Things in the house seem to die down, until Vicki and her boyfriend come home from teaching Vicki how to shoot a gun and start having sex in Vicki's room. Mrs. Slater overhears and bursts in on them, violently using her cane to rip up Vicki's waterbed. The next morning, by the pool, Vicki convinces the others to go along with a revenge prank on Mrs. Slater. Katey thinks the idea is stupid, but she's outvoted. As the girls come up with a plot, Katey gets distracted by the attic windows closing. Dr. Beck examines Mrs. Slater's latest X-rays and says that she's nearing a psychotic breakdown due to the traumatic events of twenty years ago. He says that she has to be hospitalized before some "traumatic event" moves her to violence. All she has to do is avoid any traumatic events
Cut to Vicki and her boyfriend's Colt M1911. She says it's all part of her prank on Mrs. Slater. Katey tries again to talk them out of it, but the other girls decide to go through with it. Mrs. Slater comes downstairs to find the girls setting up for the party after she specifically told them to get out. Vicki confronts her and tells her to look out by the pool for her cane.
Outside, Mrs. Slater finds her cane floating on a tire in the middle of the swimming pool. Vicki pulls the gun on her and tells her to get in the pool. To reinforce her point, Vicki takes a shot at a nearby lamppost. Liz steps forward to object, but Vicki accidentally shoots her in the leg. Vicki tells them to stop being such pussies and forces Mrs. Slater back down into the pool. She fires the gun repeatedly at Mrs. Slater. Nothing happens. Mrs. Slater looks up, puzzled. Vicki and Liz burst out in laughter. Liz's "injury" was just part of the show. Furious, Mrs. Slater climbs out of the pool and smacks Vicki in the head with her cane. The gun goes off and Mrs. Slater falls back into the water. When they fish her out of the water, Mrs. Slater is unconscious. CPR doesn't work. Katey wants to send for an ambulance, but again she's outvoted.
Vicki makes the suggestion that they just sink the body to the bottom of the murky pool and dispose of the body in the morning. They wrap the body in a tarp and weigh it down, but what they don't see is the body popping up to the surface again after they've gone. Later that night, the girls try to put on their best happy faces for the sorority party. Everyone seems to be having a good time, talking about Greek letters and failing courses. Cut to Mrs. Slater's robe and the tarp thrown aside and someone has her cane. A drunken frat boy wanders through the forest and sees something he shouldn't see. The cane is rammed right through the throat. The drunk falls to his knees with blood spurting from his neck.
All the girls are on edge at the party, though they try to hide it. Then they hear a woman screaming out by the pool. They all run out there, but it's just a couple of frat boys trying to throw a girl into the pool. Fearing that the body will be discovered, the girls convince the frat boys to leave her and check out the wet T-shirt contest. The frat boys throw her in anyway and then go to check out the contest. They pull her out of the water and Stevie (Ellen Dorscher) realizes that the body will be seen if someone turns on the pool lights. Stevie goes down to the cellar to see if she can't do something about the pool lights. Someone grabs her from behind, forces her up against a wall and stabs her to death (all in the shadows).
The band calls all the seniors up for a big dance. Meanwhile, these three guys decide they want to go for a dip. One of the gets shoved in and another one turns on the lights. The girls see the lights go on and all run out, panicked that the body has been discovered. But the pool is empty except a fat frat boy. The girls meet in the kitchen to figure out what they're going to do about this. Katey wants to go to the police. The other girls outvote her again and decide to search for Mrs. Slater's body, theorizing that she must have climbed out of the pool, but been unable to reach anyone before collapsing.
The girls separate to go look for the body. Morgan is sent upstairs to pack Mrs. Slater's clothes so it looks like she packed up and left. As she's collecting clothes, something falls out of the crawlspace onto her and she screams. But her screams are not loud enough for those downstairs at the party to hear her. It was Mrs. Slater's body, still wrapped in the tarp that fell on her. The girls check on Morgan and wonder aloud how Mrs. Slater got all the way up there (but somehow don't wonder why she wrapped herself back up in the tarp after she walked up into the crawlspace). Morgan goes to her room as the girls argue again. Katey gets disgusted with all the arguing and goes to check on Morgan. The other girls decide to dispose of the body again. Morgan gets undressed and prepares for bed. Morgan hears something at the window. She walks out on the balcony and finds a jack-in-the-box. She turns the crank until the little clown pops out. While distracted by this, the killer comes from behind her and shoves the pointy end of the cane right through her chest.
Cut to, the girls carrying the body outside and putting it in a dumpster, thinking it'll be a convenient way to hide the body while they get rid of it. Katey, on the other hand, is concerned because she can't find Morgan. She heads up into the attic and finds it filled with a child's toys. She finds a card that reads "To Ericlove Mother." She pulls a curtain back and finds a life-size clown costume that looks just like the one in the jack-in-the-box. Peter sneaks up behind her and startles her. Then he starts playing around with the toys. Katey tells him to go get another drink and leave her alone. Peter stands to leave and hits his head on a birdcage with a dead bird inside. Outside, Diane is waiting in the van for the other girls. She hears some noises and panicks. She gets out and finds no one, so she gets back in the van. Someone reaches through the sunroof and stabs her repeatedly with the cane.
Meanwhile, Vicki, Liz and Jeannie are pushing the dumpster down the road. A police car drives up and bumps into the dumpster. Vicki sends Jeannie back to the house before the officer sees her. The officer gets out and surveys the damage to his cruiser (not answering why he wasn't paying enough attention to the road to avoid a massive dumpster). He asks what they're doing out at one in the morning. They answer that they always take the trash out on Friday nights. He is about to look in the dumpster when he gets a call on his radio to return to the station.
Jeanne reaches the house and has a near miss with the killer. In the fracas, Mrs. Slater's medic alert tag falls to the ground. Jeanne reaches the house safely and finds Katey. Jeanne seems to be in shock because all she can say is "cane." Katey tells her to wait there and she'll be right back. Jeanne grabs a chef's knife and waits. Someone breaks the windowpane in the door, though, and unlatches the lock. Jeanne runs upstairs into the bathroom and vomits. The killer follows her in and turns on the showers. Jeanne tries to hide on a toilet stall, but the killer opens the stall and stabs her in the throat. Katey is panicked when she can't find Jeanne. She starts to call the police, but when Peter offers to go get her house mother, Katey realizes she can't call the police without spilling everything. She hangs up and asks Peter to leave. Peter takes it the wrong way and storms out. Katey goes for a walk and finds Mrs. Slater's medic alert tag. She calls Dr. Beck and tells him the situation (not mentioning Mrs. Slater in the pool). Dr. Beck tells her to stay at the house and he'll be right over.
When Jeanne can't be found, Vicki and Liz take the body to the cemetery themselves. They find an empty plot and dig it down a little deeper, preparing to toss the body in. Dr. Beck arrives at the house and explains the whole story. Mrs. Slater wasn't able to conceive a child so she turned to him. He did some experimental and illegal procedures to help her conceive. Katey asks him who "Eric" is. He says that Mrs. Slater has been celebrating her son's birthday as if he were still alive. He presses her about what happened to Mrs. Slater. Katey looks out the window and sees someone floating in pool. She runs down and turns on the pool lights. It's Diane. Dr. Beck calls the police and tells them to get to the sorority house. Katey realizes that Mrs. Slater probably followed Vicki and Liz to the cemetery. Beck shifts gears and tells the police to meet him at the cemetery.
Vicki and Liz have sufficiently hollowed out the hole, so Vicki tells Liz to pull the van around. Liz gets in the van, but someone slashes her throat. Vicki gets out of the plot to see what the holdup is. When she opens the van's door, Liz's body falls out. Vicki turns around just in time to see the killer holding the cane. She gets struck with it several times, including one finishing blow right to the eye. Dr. Beck undoes the ropes tying up the body and pulls back the towels to reveal Mrs. Slater. Katey looks down at her a gawk. Dr. Beck realizes his worst fears and explains them to her with two words: "He's alive."
Beck tells her to get back to the car. They arrive at the empty house and Katey asks where the police are. He tells her they're not coming and injects her with a sedative. He sets Katey down in the middle of the living room and locks all the doors except for the patio doors, which he leaves wide open.
He explains to her that he used a drug on Mrs. Slater to help her conceive. Unfortunately, the drug caused deformities in the fetus. As the room starts to spin, he explains that Eric is evidence of what he did and he must eliminate him. He plans to lure Eric there using Katey as bait. Katey starts to hallucinate, haunted by her dead friends and Mrs. Slater. Someone tries to open one of the doors, but it has been barricaded. Beck sees shadows moving and someone steps into the patio doorway. He fires his tranquilizer gun at the shadowy figure thinking it is Eric, but it's Peter.
Beck injects him with a sedative too. Katey takes the opportunity to run up the stairs and into Vicki's room. Beck pleads with her to come back and be his bait. She grabs the gun they used for the prank and loads it in case Beck finds her. Instead, Dr. Beck gets run through with the cane. He staggers down the hall before Eric hits him with the cane again, sending him spilling over the balcony to the hardwood floor. Katey comes out of the room and finds Eric (Charles Serio) standing over Beck's body. Katey runs up to the bathroom and finds Jeanne's severed head floating in the toilet. Katey staggers out to the second floor balcony, trying to find a way out. When she can't find one, she climbs the ladder to the attic.
Hearing Eric downstairs, she decides to lure him up to the attic and ambush him. She winds up the music box and sets it at the top of the attic stairway. Unfortunately, the drugs are still working on her and she starts to hallucinate again. Eric still hasn't come up the stairs. In fact, he's disguised himself in the clown costume and is standing right beside Katey. He tries to stab her with the cane, but she sees him coming just in time and ducks out of the way. She shoots at Eric, but when nothing happens, she realizes that they're all blanks. Eric gets distracted by a little toy ball. Katey sees her chance and rips the head off of one of his dolls to reveal a knife underneath. She stabs him repeatedly in the chest until he falls through the doorway down to the next floor.
Katey falls to the floor and lets out a sigh of relief. But while her back is turned, Eric opens his eyes.