Picking up immediately where the first film ended, Marybeth (now played by Danielle Harris) is attacked by Victor Crowley (Kane Hodder), but manages to escape. Jack Cracker finds her, pulls her out of the river, and takes her back to his cabin. After finding out her last name, he forces her to leave, telling her that if she wants help, she needs to see Reverend Zombie (Tony Todd). Moments after she leaves, Jack views Shapiro's camcorder, which he found in the swamp. The footage shows Shapiro filming different topless women, including Misty and Jenna. After Jack finishes watching the video, he is killed by Victor Crowley, who gouges his intestines out and strangles him with them until he decapitates him.
Marybeth returns to Reverend Zombie's shop in New Orleans and, after demanding to speak with him, he reluctantly lets her in. It's revealed that Rev. Zombie had a small business going on with Shawn, the tour guide who was murdered the night before, and the boat was one of his own. After learning her last name, he tells her that her father was one of the boys responsible for causing the fire that originally killed Victor Crowley. He also tells her that Thomas, Victor's father, had an affair with his wife's nurse after she was diagnosed with stomach cancer. Moments before dying, Shyann Crowley placed a curse on the child conceived by Lena from the affair. Months later, she dies after giving birth to the deformed Victor Crowley. After Victor is killed in the fire, Thomas confronts the three boys responsible but they, along with their parents, deny it. Thomas becomes a shut-in and eventually dies of a broken heart ten years later. This story is then complemented by various scenes in which the undead Victor slaughters the people who wander into his land.
Marybeth tells Reverend Zombie she wants to go back and retrieve the remains of her father and brother. He agrees, but tells her she must bring a family member with her. After she leaves, Zombie calls Justin (Parry Shen), Shawn's brother, and tells him Shawn never came back with the boat. He lies and says they are going into the swamp to find Shawn and the boat. He tells Justin to summon a group of hunters and, in particular, a man named Trent Graves (R. A. Mihailoff) to go with them. Marybeth returns home, where her uncle Bob (Tom Holland) promptly shows up. He tells her she needs to stay away from Reverend Zombie, but reluctantly goes with her to a recruitment meeting in Zombie's shop. Zombie tells the hunters that he will pay them $500 each to retrieve his boat and $5,000 for the head of Victor Crowley. He tells Trent that he will pay him double to go, and Trent agrees. The hunters leave and go into the swamp, with Marybeth and her uncle among them.
They find the boat and, as the rest leave, two of the hunters, Cleutus and Chad (Ed Ackerman and David Foy) stay by the boat. The others split up to find Victor. Marybeth, Zombie, Justin, Bob, and Trent go looking for Crowley's shed and the bodies. Along the way, Zombie tells Justin that Trent, Bob and Marybeth's father were the kids who started the fire that killed Victor. He says that once Crowley kills Bob and Trent, his soul will be at peace and leave the swamp. After not finding the bodies in the shed, they check the main cabin. Meanwhile, the rest of the hunting party are killed off by Crowley. Chad is hacked in the face violently and Cletus has his face mutilated by a boat propeller. While Layton and Avery are having make-up sex, Victor appears and decapitates Layton. Avery tries to run away but Victor whacks her in between the legs and in the chest with his hatchet. Finally, John and Vernon (Rick McCallum and Colton Dunn) are both split in half from the groin up with a long chainsaw. While searching the cabin, the remaining party members hear Victor outside.
As they hide, Justin tells Marybeth of Zombie's plot to get her uncle and Trent killed. She runs to warn Bob, but Justin jams the door shut with a chair. Victor turns up behind Justin and kills him by ripping his head open with a belt sander. Bob, in an attempt to save Justin accidentally releases Victor. Marybeth attempts to attack him but is tossed against the wall. Victor then spears Trent against the wall and the two stumble into the kitchen, where an epic battle ensues. Victor makes use of his strength while Trent uses the nearby surroundings to his advantage, temporally pinning Crowley against a support and whacking him with tables and chairs, but Trent is finally killed when he attempts to kill Victor with a clever as Victor breaks his leg and severs the top half of his head by kicking it against a table. Zombie grabs Marybeth, drags her out of the house, and traps Bob inside with Victor. Marybeth screams as she hears Bob murdered by Victor inside. She falls to the ground crying and Zombie declares Victor Crowley dead.
Marybeth says she will go to the police. Zombie tells her she will not as he points a gun at her head. She tells him that Bob was not her real uncle; her father's brother had died of leukemia when she was twelve. Victor then breaks through the wall of the cabin and goes after Zombie. Zombie chokes Victor with his hands and seems to be inflicting pain but Victor kills him by severing him in half and then pulling his torso off his skin by pulling on his spine. Marybeth attacks Victor with his own hatchet, knocking him to the ground and striking him in the head repeatedly until left a bloody pulp. She then stops and walks off just as Victor's hand twitches, then returns and stands over him with a shotgun. She yells "Fuck you!" and she fires the gun into the remains of his head, finally shooting them off and seemingly ending his reign of terror.