Plot

A fearless colonel bets $10,000 that he can survive one night in a haunted mansion but he learns that the past can haunt you worse than any ghost can. Dracula explains to his grandson how he served his country against the Nazis.

Dr. Mazzi is at a gentleman's parlor, recounting the night he dared to stay in a haunted house. He was later found wandering the streets, his hair turned white by the shock, and was committed to a sanitarium for a while; he still has no memory of the events. Colonel Malloy (Leslie Nielsen) scoffs at the notion of ghosts and the supernatural, branding the Doctor a coward. He claims his experiences in the various wars he's fought in are far worse than any ghost story. The Doctor then wagers $15,000 for Malloy to spend the night there, and his friends pitch in as well.

Malloy goes to the house, confident that he can last until sunrise. He enters and begins to survey the area, but immediately upon entering, he begins to hear ghostly laughter and sees a floating head that vanishes when he draws his gun on it. In the dining room he discovers that the windows are bricked in, and continues to experience laughter and ghostly apparitions. Although slightly unnerved, he lights a pair of candelabra and takes one to continue exploring; as he leaves we notice an unseen force blowing out the other candles behind him. Working his way upstairs, he is stalked by a glowing green apparition that he fires on, and it leaves a small trail of goo.

Malloy makes his way to the cellar, and the door slams shut behind him. He heads down the stairs, but falls after breaking a loose step. An odd slimy trail leads to another door, accompanied by more maniacal laughter. After his exit is blocked, another spirit advances on him, and he empties his gun at it to no effect. Now more shaken than before, Malloy finds the door open once more, and returns upstairs. Unpacking his gear, he has some coffee and a cigarette to calm his nerves. Hearing strange music, he investigates to find a figure dressed like the previous ghost banging on a piano; the figure turns toward him and its hands burst into flames. However, he notices a gas line running to the figure, and cuts it, deducing that it is merely a special effect. Now confident that the men from the club have set him up, Malloy boasts aloud that the only way he will lose is if they murder him and goes to the bedroom to retire for the night. Finding the room and bed in good condition, Malloy disarms a tripwire he finds under the bed and settles in, but a set of iron bands suddenly appear, pinning him down as a giant pendulum blade descends toward his neck. However, Malloy is defiant, and dares the doctor to kill him. The blade stops and Malloy counts himself to sleep.

In the morning, Malloy awakens to find all is well. He heads downstairs to find a breakfast arrayed for him. A TV monitor turns on, showing a dark-haired Dr. Matzi, who congratulates him on his resolve for outlasting his trickery. However, he explains that although the food is harmless, Malloy's coffee last night was drugged while he was exploring. He admires Malloy's courage, but claims that all men have a breaking point. He describes an event that occurred during the early days of WWII, in which Malloy (working for a British unit since the US hadn't entered the war yet) captured an Italian outpost where Dr. Mazzi's father was stationed. Although the elder Mazzi was merely a concert pianist conscripted into service, Malloy thought he had vital information about the Germans; when he refused to talk, Malloy poured gasoline on the man's hands and set them on fire, ending his career and leaving him crippled. The younger Mazzi swore revenge, and eventually tracked Malloy down. Malloy makes to leave, but the doctor informs him that he is a biochemist, working for the government on a special type of biological warfare that slowly causes the victim's bones to disintegrate, leaving them as a spineless earthworm-like creature, unable to function. While Malloy slept deeply from the sedative last night, he was injected with the formula. Malloy doesn't believe him, but the doctor encourages him to look in the cellar where he has injected his research colleague, who is now turning into a large slug-like thing. He doesn't care if Malloy tells the police, because no one will believe him, and medical science has no way to reverse the effects, so regardless of his own fate he now has his revenge knowing the agony Malloy will endure over the following months. He taunts Malloy, telling him to go look at what he will become; Malloy starts to go to the cellar door, but finds more of the slimy trail he found last night and realizes what it was. He tells Mazzi that he still loses, and turns his gun on himself. As he falls dead, Mazzi informs him that HE loses, because there was nothing in the cellar all along; he has bluffed Malloy into killing himself.