The film begins with a news reporter and her camera man investigating a crime scene much further than what was already given, ala The Blair Witch Project. They walk in an abandoned mill, hoping to find more clues only for the news reporter to be suddenly struck on the head. The camera man gets frightened and runs off before being struck as well, dropping his camera and dying moments later. You then get a glimpse of a disfigured man smiling into the camera.
Three days earlier, Allison (Katrina Bowden) and her friends, Chad (Jesse Moss), Jason (Brandon Jay McLaren), Chloe (Chelan Simmons), Naomi (Christie Laing), Chuck (Travis Nelson), Mitchell (Adam Beauchesne), Mike (Joseph Allan Sutherland), and Todd (Alex Arsenault), are out on a road trip, hoping to find a good time in the woods to party and smoke weed, before they rush in front of a truck belonging to Tucker (Alan Tudyk) and Dale (Tyler Labine). The two catch up with the college students, giving them dirty stares for cutting them off and speeding, which was misinterpreted by the students as a threat. Naomi says they forgot to bring the beer and the college students panic and stop at a store.
At the store, Chad and Allison walk inside to see Tucker speaking with the store clerk and the two give each other a stare off, with Chad and Allison believing they are intimidating them, but in reality, the two hillbillies were intimidated by them. Allison browses the store and catches Dale on the other side of a shelf, who becomes frightened and turns around. Chloe then comes and confesses to Allison that the place is "creepy" and she agrees. After the two leaves and Chad purchases beer, Tucker and Dale, who are both munching away at pickled eggs, are putting their supplies in their truck. Dale, who has an inferiority complex, begins staring at the college girls, particularly Allison, and feels that girls like them cannot mix well with a guy like himself. Tucker tries to uplift his friends spirit and advises to go talk to the girls, telling him to just smile and laugh when he gets nervous. Taking the advice, Dale, while holding a bush-whacking scythe, approaches the girls and attempts to strike up a conversation, laughing nervously while doing so. This easily terrifies the girls, which makes Chad step in and scare off the nervous hillbilly.
The college students continue on their road trip while Tucker and Dale drive to their newly-acquired vacation home, which the two were dreaming of getting, all the while Tucker continues giving advice to Dale, that "Life is short, you gotta go after what you want." He then drops beer upon his lap and Dale goes down to clean it up. Suddenly, a cop car is following them, which Tucker slightly panics and pulls over, with Dale struggling to get free, finally pulling himself up without his shirt on as the cop reaches their window. Tucker hands him his temporary license, as he lost his and a new one is being delivered via mail. The cop begins interrogating the two and asks where they are headed. Tucker states they are heading to their new vacation home in the woods. The cop warns them to stay away from that place as dangerous things happened there and tells them they have a busted tail light before leaving.
The two finally reach their old cabin, which they call a "fixer-upper", seemingly impressed by the shoddy wooden house. The two go inside to see bones hanging from the ceiling, which Tucker assumes belonged to an archaeologist, and newspaper clippings on a wall, all of which connected to the Memorial Day Massacre, but ignored by the two friends as they caught eye of a coupon instead. The cabin is obviously falling apart, as when Tucker leans on a pillar, it creaks and a beam of wood with nails poking through the end of it, falls. Dale saves Tucker from being impaled through the head and the two agree to fix that as soon as possible. Meanwhile, the college students set up camp and are sitting around a campfire. Chuck asks if they all want to hear a scary story, which they all verbally reply "No." Chad then comes in and asks if they want to hear a real scary story, in which the others comply.
He begins taking his inhaler (he has asthma) and starts with the Memorial Day Massacre, which occurred twenty years ago at the very woods they are camping on. Six college students were out partying on the woods until two psychotic hillbillies approach them menacingly. One of them holds a saw blade, which he scratches the back of his neck with, and flings it at one of the male students, which cuts through the middle of his head. The second comes in and approaches a girl, who backs away to a tree, and stabs her throat. A blonde girl goes running through the woods and falls down a hill. Crawling away and hiding behind a log, she is found by one of the killers and watches as the weapon comes down.
The flashback ends with Chad saying there no bodies were found and only one lone survivor lived to tell the story. The whole group looks mortified and terrified until Mike comes in and says that there is a lake nearby and asks if they wanted to go skinny dipping. Relieved by the dramatic tension, they all agree. It gets dark and Tucker and Dale is shown fishing on a boat out on the lake. Dale and Tucker reach in their cooler to see that there is only one beer left, in which Dale gives to Tucker, who then advises him to "stand up for himself" after calling him hopeless. Allison prepares to go skinny dipping and hears a noise. Turning around, she sees that it is Chad scaring her with an axe. She is easily turned off by it but it approached by the drunk Chad, who begins to tell her to "drop the act" of pretending to be better than everybody. He then confesses that he's glad the two get to spend time together before trying to kiss her. Allison backs away, telling him he's drunk, which he says is a good thing as it lowers his "inhibition." He then tries kissing her again which makes Allison push him away again before leaving.
The rest of the students take off their clothes and drop into the lake, which captures the attention of Tucker and Dale, who can easily see from a distance a topless Chloe. Dale is immediately put off at the thought of being near them while Tucker tries to row the boat closer to get a better look. Dale attempts to row the other way until Tucker catches glimpse of Allison taking off her clothes, save for her bra and panties, on top of a rock. Dale looks away and tells Tucker to row the boat and calls him a Peeping Tom. Allison begins climbing down the rock until Dale accidentally shouts Tucker's name, which prompts her to turn around and slip in fear, hitting her head as she falls down into the lake. Tucker and Dale briefly argue before they realize she isn't getting back up. The two row their boat to the spot where she fell and Dale dives in to save her. From a distance, Chloe sees Dale bringing up an unconscious Allison to their boat and screams out in terror. Tucker calls out to the college students, "We got your friend!" Taking this as a menacing threat, the students run away, which confuses the two hillbillies. Deciding to take the unconscious Allison back to their cabin, hoping that her friends will come by and pick her up in the morning, the two row away.
Chad is shown again, drunk, back at the campsite, throwing his axe at a tree as target practice. The frightened students tell Chad that they saw the two hillbillies take Allison away. He picks up his axe and runs to the shore, but it is too late as the two hillbillies carry the girl off into the fog. Next morning, Allison wakes up with a bandage wrapping around her head, dazed and confused upon looking inside the cabin. She spots the bones and a mean-looking, one-eyed dog across the room. Dale then comes in, which terrifies the young girl, and panics the shy hillbilly, who only came in to give her pancakes. Assuming she didn't like them, he goes back to make something else. Meanwhile, the college students are discussing what they thought they saw when Allison was being carried away, with Chuck saying that it looked like "one of them was eating her face", an obvious misinterpretation of CPR. Naomi then suggests calling the police, which Chad disagrees with, seeing it as a chance to fight evil without any rules or regulations, remarking "it's us against them." Chuck volunteers to take his father's truck to find help, which Chad is put off by but says he can leave if he wants to. Chuck runs off much to Chloe's dismay.
Jason spots the cabin around the corner and alerts his friends. They all fear approaching the cabin, save for Mitchell who claims that they may not be psycho killers. Chloe then suggests he should just walk up and knock on their door, which Mitchell snarks at but reveals he is also afraid. Back in the cabin, Dale returns with eggs and bacon and gives it to Allison. The two talk for awhile, in which Dale says the cabin is Tucker's new vacation home, introduces himself, and the mean, one-eyed dog, named Jangers, who is actually sweet and tender. He tells her she hit her head after she slipped into the lake and Tucker and Dale rescued her from drowning. He then says her friends ran off, which he takes it as an immediate reaction to a sudden crisis, and hopes they'll return to pick her up. Throughout their conversation, Dale shows his anxiety from talking to a high-class woman and attempts to clean the place up. Allison asks if there is anything fun to do in the meantime, which Dale suggests a board game, Trivi-Up.
Back to the college students, Chad, Mitchell, Mike, and Todd play rock, paper, scissors to send of their own to the cabin to investigate. Mitchell loses. He fearfully approaches the cabin while Tucker prepares a chainsaw to cut through some wood. He looks up and spots Dale and Allison playing the board game and having fun, which he enviously claims "Damn Romeo." He begins cutting through the wood, not knowing a bee hive is hiding within, which he accidentally cuts through. The bees swarm Tucker, which prompts him to swing his chainsaw madly and run from them. Mitchell spots this and mistakes this as being attacked. He yells at his friends to run before running off into the woods himself, with Tucker following. The two run deep until they both turn to briefly look at each other before Mitchell runs straight into a large tree branch, which impales him through his gut. Tucker continues running away from the bees. A dying Mitchell spots a lone bee hovering near him and has a look of realization before dying.
Meanwhile, Allison and Dale continue their game of Trivi-Up, where Dale reveals that he has a weird brain, in which he's extremely dumb but can remember everything he hears. Allison remarks that he isn't dumb and that makes him quite brilliant, telling him there is a difference between education and intellect. She tells Dale that she plans on getting a Bachelor's Degree in Psychology. She admits that it's a dumb dream but Dale professes that dreams aren't dumb and supports her. Tucker then comes in, swollen-faced and angry at Dale for not helping him. He goes to the cooler to wash his face with beer as Dale goes to take out the stingers. He tells Allison that he saw her friend out there, running away, which he assumed must be because he was allergic to bees. Allison tries to go out there and find them but Dale tells her to rest and that both Tucker and himself will find them.
The college students find Mitchell's body hanging from the branch and see it as a warning from the hillbillies to stay out of their woods. This provokes Chad even further into insanity by breaking Chloe's phone and throwing his axe, which nearly hits Jason. They then hear Tucker and Dale approaching and hide behind a tree. They listen in on a conversation of Dale beating Allison at a game of Trivi-Up and mistakes it as him torturing their friend. Tucker then calls out "College kids!" which terrifies them. He repeatedly calls them out louder, until the two decide to leave them a message with Chad's axe in case they return. Dale engraves a message on to the log and leaves behind the axe. When the coast is clear, the college kids walk up to see the message: WE GOT UR FREIND.
At the cabin, Tucker is chipping away wood via the wood chipper while Dale digs a hole for the outhouse. Allison, who re-fashioned Dale's clothes to fit her, approaches him and volunteers to help out, which Dale refuses, but is surprised to see the high-class college girl able to dig at an outhouse hole. She confesses she grew up on a farm and had to work there. The college students return, hiding behind some bushes and see Allison digging away at a hole while Dale watches in amazement. They quickly assume she is digging her own grave. Todd holds his spear, Chad readies his axe, and Mike prepares his pocket knife, and they split up into three groups, with Mike, Chloe, and Naomi going after Tucker, Todd going after Dale, and Chad and Jason remain where they are. Once they all get into position, Chad makes his call to charge, which catches Dale's attention and sees Chloe and Naomi from a distance. He calls out to them as Allison hears Todd charging at Dale with a makeshift spear. She calls out Dale's name, which makes him turn to see Todd before accidentally knocking Allison out with his shovel and slipping into the outhouse hole next to an unconscious Allison. Todd then trips on a branch, flings the spear next to Dale and falls onto it.
As this is occurring, Mike sneaks behind Tucker, who is still casually throwing wood into the wood chipper and takes out his pocket knife. He flings forward, preparing to stab him, but timed it wrong when Tucker bent down to pick up another log and falling head first into the wood chipper. Tucker panics as blood spurts out and splatters all over Chloe. He grabs hold of the legs and tries to pull Mike out but to no avail. The machine shuts down and a frightened Tucker ignorantly asks "Are you okay?" before frustratingly kicking the machine.
Dale, covered in Todd's blood, runs into the cabin with an unconscious Allison and panics at what he just saw. Tucker follows, covered in Mike's blood. The two panic and contemplate that the college students must be some sort of psychotic suicide pact and runs around the woods killing themselves. They hide all the sharp objects in hopes of avoiding anymore needless deaths. Dale suggests calling the cops but Tucker claims that it will only bring more trouble as it can label the two as killers, adding that only a moron would believe college kids are killing themselves in their property. Tucker then suggests hiding the bodies.
The college kids regroup, with Chloe desperately trying to light a cigarette while covered in Mike's blood and Naomi asking why didn't they go for help before, all the while Chad is casually sharpening his axe. They all agree to go get help except for Chad, who wants to continue his survival game. He remarks that it is "us against them" and says that they must destroy evil in order to live and anyone who tries to run deserves to die, which disgusts Jason. Suddenly, they hear sirens from the distance. Chuck is inside the passenger seat of the cop car, the same one that pulled Tucker and Dale over, and brakes upon seeing Chloe approach them. Naomi, Chloe, and Jason hurry into the back with Chad cursing at them from afar and running off on his own.
Tucker and Dale, in the meantime, try to get Mike's lower half out of the wood chipper, which makes Dale very queasy. The successfully take it out and drag it out only to see the cop car stop in front of them. The sheriff tells the kids to stay in the car while he goes and takes care of business. He then begins to interrogate the two hillbillies, with Tucker doing most of the talking. Without a proper excuse, Tucker merely comes out with the truth: that the college kids are psychos and are killing themselves all over their property. An afraid Dale begins to blabber out that Allison, who is inside their bedroom, unconscious in their cabin, can tell him, which frustrates Tucker and makes the sheriff that much more suspicious. The two lead him into the cabin which makes the college kids panic.
Inside, the sheriff investigates Allison's conditions and says she's not braindead and will recover. He then tells the two that he warned them about the woods and told them to stay away. The sheriff confesses that the two could be taken in for involuntary manslaughter, if they are lucky, and as he is saying this, he leans on the weak wooden pillar, which Tucker and Dale both warn him about, but is too late as the beam comes flying down with the nailed board and impales the sheriff through the head. Still alive and managing to step outside, the sheriff lugs to his car as Tucker, Dale, and the college kids look on in fear, and attempts to call for help via radio before falling dead. Dale and Tucker argue over fixing that beam while Naomi, Chloe, and Jason panic from the back as they are locked inside. Chuck, from the passenger seat, spots the sheriff's gun and runs outside to shoot at the two hillbillies. Seeing that the gun isn't firing, Dale, in panic, suggests that the safety might still be on and Chuck stupidly turns the gun around for the safety and points the barrel towards his head, accidentally pulling the trigger as he turns off the safety. Goodbye Chuck.
Tucker yells at the kids to be more careful as Chad comes in from behind, picks up the gun and starts shooting at them. Dale and Tucker run inside and lay on the ground in order to avoid the gunshots. Tucker blames Dale for the situation they're in and Dale responds by saying that they shouldn't have gone fishing, which he confesses to hate. This hurts Tucker's feelings. More shots are fired until they hear a dog bark outside. Tucker asks where Janger is which makes Dale panic, crawl towards the window, and see that Chad is holding the dog hostage, with the other three, now freed from the car, watching. Tucker then comes up with a plan to have Dale use the nail gun to create a distraction while Tucker himself goes outside and frees Janger. The two make their move as Dale shoots the nail gun close to the kids but not at them. Tucker runs around from behind and uses camouflage to reach Janger. As both Dale and Chad shoot at each other, Tucker successfully reaches Janger as Chad runs out of bullets and threatens Dale's dog. Tucker frees Janger but is caught by the ignorant college kids.
Tucker runs into the woods in fear and is chased by the kids. He hides behind a log, much like the woman in the Memorial Day Massacre, and attempts to camouflage. It works until Chad spots him and knocks him out with a punch. Moments later, Tucker wakes up to see himself dangling upside down from a tree. He remarks to them "what the hell is wrong with you kids?" which provokes Chad, who tells Jason to hold him steady, and says that Tucker is pure evil before proceeding to chop off his finger for their fallen friends.
Back in the cabin, Allison wakes up to see Dale wiping her head and covered in blood. She asks what happened and Dale cannot seem to tell her, crying in shock and anxiety. She comforts him and calms him down. Dale then asks if her friends are crazy before telling her that they have been killing themselves, then tried to kill Tucker and himself, before trying to kill his dog. She then remembers Todd running at them with a spear and begins to look confused. Dale says that her friends seem to enjoy killing and panics when the door starts banging. She tries to calm him down by saying her friends would never hurt anybody but then hears Chad scream "Die hillbilly!" from the outside. She goes out to check and sees the corpses of the sheriff and her friends and is repulsed. She looks down to see a bloodied cloth on the doorstep. Allison comes back in and Dale recognizes the cloth to belong to Tucker's shirt. They unwrap it to see two bloody fingers and a note. The note says: NOW WE GOT YOUR FRIEND. TRY AND GET HIM BACK.
Dale musters up his courage and decides to go out and save Tucker. He grabs a machete and prepares to walk out. Allison tries to stop him saying they shouldn't instigate things and defends her friends by saying that they must be trying to protect her. Dale gets offended and asks why they would think such things. Allison confesses it is because he is a hillbilly, and both her and her friends misjudged him. Dale seems to accept this and depresses him. Before he departs, he asks Allison to tell her friends he is harmless and never wanted to hurt anybody.
Dale goes out into the woods, calling out Tucker's name and holding his machete. He comes across puddles of blood and Tucker's hat and sees the corpse of Mitchell, still dangling from the branch. Shaken, Dale presses onward when he hears Tucker respond to his calls. He sees Tucker dangling upside down and approaches him. As he's walking, Tucker tells him it's a trap and Dale accidentally sets it off. Thankfully, he stood still and the makeshift spear only cut through his pants leg. He cuts down Tucker, who falls headfirst onto the ground and comments that their vacation sucks.
Night comes, and Chad and Naomi sneak into the cabin, looking for Allison. They creep in and see her standing in the bedroom and whispers to her. When they are notified that nobody else is home, they calm down and speak normally. Chad asks her what they did to her, which she replies that she is perfectly fine and all this has been a huge misunderstanding. Chad ignores this and proceeds to burn the cabin down. Allison yells at him to stop and that it is their vacation home. Chad becomes enraged and tries to persuade Allison that Tucker and Dale are evil men and that he was trying to save her. She retorts by saying they saved her life. Naomi makes a comment that Allison developed Stockholm Syndrome, which angers Chad. He questions Allison on whether if she has truly fallen in love with Dale. He lunges at her with his axe until Tucker and Dale rush in to save her. They both prepare to lunge at each other with their weapons until Allison comes between them and sways them both to calm down, sit, and drink tea (which Tucker makes a sarcastic remark that he'll bring out the finger sandwiches).
She sits Chad on one end of the table and Dale on the other and begins serving them tea. Chad asks her if it's Chamomile Tea and says that he cannot drink it if it is as it'll harm his asthma. She says it's Earl Grey. After serving tea, she begins the therapy session. She will allow both sides to tell their sides of the story and to consider their perspective. Chad complies and begins way back before he was born, twenty years ago, during the Memorial Day Massacre.
His parents were among the partying college kids who were killed by the two hillbillies. His mother, revealed to be the blonde woman who ran away into the woods only to be caught by one of them, was the lone survivor of the massacre. She was brought back to camp, where she lied next to her lover, Chad's father, who didn't know she was pregnant with Chad, and reached for a knife in the toolbox next to her. With it, she tried freeing him. When one of the hillbillies tried grabbing her, she stabbed him in the leg and escaped. This caused the hillbillies to throw Chad's father into an incinerator and watched him burn to death. The woman eventually birthed Chad and had to be institutionalized afterwards. He heard the story from his grandmother.
As the flashback ends and Chad explains why he holds deep hatred towards hillbillies, Dale defends himself and Tucker by saying they were much too young to be part of such an event and says that he's harmless, saying he can't even hurt a fish. Outside, Jason and Chloe sneak around to a window, claiming that if Chad and Naomi had not returned in fifteen minutes, the two of them would charge in. Allison asks how both of them feel after telling their stories, Dale admits he feels better. Suddenly, Jason barges in with a weed whacker and charges towards Tucker, who narrowly dodges the spinning blades. Jason accidentally strikes Naomi's face and begins mutilating her. Chad throws the table forward onto Dale and tries hacking him with an axe only to be punched by Tucker. Chad grabs a lit lamp and throws at the two, but misses and accidentally hits Jason's leg. He catches on fire and begins to panic, with Tucker and Dale advising him to stop, drop, and roll. Chloe grabs a jar and tries to douse the fire only to ignite Jason even further. He flings himself around madly and finally falls over, burning to death, and igniting the gasoline Chad was pouring moments earlier. Shocked, Chloe lights a cigarette next to piles of gasoline cans, which Dale admits that he should've moved those earlier. Tucker, Dale, and Allison make a run for it, followed by Chad but is held by Naomi, who is begging for his help. The cabin explodes as the three narrowly make it out, killing Jason, Chloe, Chad, and Naomi. Tucker and Dale stare shocked at their vacation home incinerating and Allison states that she is a terrible therapist, which Dale disagrees with. Just as things calmed down, Chad emerges, half of his body burned. The three run to the pickup truck and try to start the truck as Chad slowly limps to them, axe in hand. They finally get it started and drive away. As Dale mocks the college kids, he loses his focus and drives into a tree.
Dale wakes up with Janger licking him and sees that Allison is missing and Tucker lying beside a tree, bleeding heavily. He approaches his friend and tries to help him. He tells Dale that Chad took Allison away and to go after her, much to Dale's dismay. He admits to him that he was always better at everything and he sees the way Allison and Dale look at each other. Proclaiming their friendship, Dale promises to return for Tucker and runs off with Janger, who can lead him to Allison.
Come sun rise, Dale and Janger reach an abandoned lumber mill. He leaves behind Janger and presses on alone. Chad tied Allison up to a log next to a saw, ala a classical Western villain. He says that she turned hillbilly on him and if she begs and apologizes, he will let her go, and kisses her. Feeling that the kiss wasn't right, he decides to give her a second shot and licks her face. He hears banging from outside and smiles. Outside, Dale breaks open the tool shed and straps himself up with various weapons. He equips himself with a welder's mask and a chainsaw before charging in. Inside, Allison gets frightened by Dale's appearance and he reveals himself to her. Using a knife, he attempts to cut the ropes, while Chad starts the intercom and begins making threats to Dale and Allison. The machine starts and the log Allison is tied slowly begins to saw it vertically in half. Dale continues to struggle with the ropes until Chad appears and attacks Dale. He throws his axe at him but misses and the two fight each other, Chad with a metal pipe and Dale with his chainsaw. Chad gains the upper hand until Dale stabs him in the leg with a knife strapped to his boot and elbows him in the stomach, reaches forward, grabs the axe, and with a lucky throw, cuts Allison's ropes loose. With the girl away from danger, Chad and Dale continue their fight. Dale throws his chainsaw at him to keep him off-balance.
Allison and Dale run upstairs and locks the door behind them. Dale looks around for something to stab Chad with while something catches Allison's eye. Allison calls out to Dale as he looks at a box of Chamomile Tea and shows him an old newspaper. The headline states that one of the killers of the Memorial Day Massacre was caught by some policemen, one of them happening to be the same sheriff back at the cabin. The killer bared strong resemblance with Chad. It is revealed through the article that the survivor was tortured and raped before being freed.
Chad suddenly emerges with the chainsaw and threatens the two. Dale is knocked to the ground and just as when Chad prepared for the killing blow, Dale shows him the newspaper article and says that he too is hillbilly. Refusing to accept this, Allison remarks that he is indeed "half hillbilly." Just as Chad is occupied with the newspaper article, Dale attempts to grab hold of the box of Chamomile Tea. Chad grows angry and proclaims that "everything is a lie" and lunges forward. Dale grabs some of the tea powder and flings it at Chad. His asthma begins to act up and Dale reveals that he won't be harmed just as Chad steps backwards through a window and falls to the ground. Allison and Dale look down and sees Chad presumably dead.
Night comes as a squadron of cops investigate the mill. The reporter and her cameraman that appeared in the beginning of the film report a mass suicide of college students and a deranged killer that is responsible for it remains at large. Tucker watches this as he recovers from a hospital. Dale comes in, clean and well-groomed, and sees how his friend is doing. Tucker reveals he got his fingers back, and high from prescription medication, realizes that one of his fingers look different. It appears as though they got Chloe's finger with a red painted nail and mistook it as Tucker's and sewed it onto him. Dale brings his friend cold beer with a bendy straw and reveals that he is going out bowling with Allison. Tucker congratulates his friend for overcoming his fear of women.
At the bowling alley, Allison proves to be a fantastic bowler. One of Dale's friend, BJ, who seeks advice on how to get women such as Allison to like him, asks Dale for help, who gives him the same advice Tucker gave him a few days earlier. He directs BJ to go talk to one of the young woman playing with her friends not so far away. As he leaves, Allison and Dale are left by themselves. Dale gives Allison a gift: a pink helmet that suits her accident-prone nature, and the two confess love for each other before kissing. In the back, BJ accidentally knocks out one of the women and starts to carry her but the two continue kissing.