At the North Bend Psychiatric Hospital in 1966, a young patient named Tammy is attacked and killed by an unseen force during the night.

Kristen, a troubled young woman sets fire to an abandoned farmhouse. The local police take her to the psychiatric hospital. She is taken to the ward where she meets other patients: Iris, Sarah, Emily, and Zoey, and is given Tammy's old room. She meets Dr. Stringer, her therapist, but is unable to recall anything about her past. She later attempts to escape, only to be caught and returned to her cell. Waking up in the middle of the night, she sees a horribly disfigured person staring at her. While she is with Iris and Emily, Kristen sees two people looking at her from Dr. Stringer's office, but the girls give no clue as to who they are. Whilst taking a shower, Kristen is attacked by the disfigured figure, but upon telling the nurse this, she is drugged and put through intense electroshock therapy. On a session with Dr.Stringer, Iris mentions Tammy but is then immediately halted by the doctor.

In Iris's last therapy session, Dr. Stringer uses hypnotherapy to unlock her hidden memories. After the session, Iris is killed by the disfigured zombie. Kristen tries to find out what happened to her friend and finds Iris's sketchbook, where there is a sketch of the zombie that had attacked her, with the name ''Alice Hudson'' written on top. It is revealed that Alice was a patient at the hospital. That night, despite Sarah and Zoey's warning that it is nearly impossible to leave, Kristen and Emily attempt to find Iris and escape. However, the alarm is triggered. Kristen is thwarted by Alice's zombie and blacks out, reawakening back in her room, and it is revealed that Emily was caught.

On her way to her final appointment with Dr. Stringer, Sarah flirts with a nurse, but is rejected. She then goes to the other girls and asks Kristen what happened to her plan and also seemingly gives her a clue that they did not find Iris because they were "not looking into the right places." After bickering with Emily, she is killed by Alice's zombie. Kristen, noticing Sarah is missing and finding out that Zoey's doll formerly belonged to Alice, she forces the girl to tell her what is happening. She finds out that all of the girls had killed Alice, led by Tammy, because Alice constantly hurts them. Now the ghost is after them for revenge. Emily attempts to commits suicide, thinking she is doomed. Kristen attempts to stop her, but Alice's zombie appears again and kills Emily. Kristen plans a last attempt to escape by holding Zoey as a pretend hostage. Their attempt is thwarted by Roy. She is drugged and placed in a [[straitjacket]]. However, she manages to escape and takes Zoey with her to try and break out one last time. Zoey is captured by the zombie and killed off-screen. Kristen manages to kill the zombie, and finds a file on Alice Hudson, which details her treatments and all of the girl's names, including Kristen's.

Dr. Stringer then reveals the truth: Kristen's real name is Alice Hudson. Throughout the film, various flashbacks are shown of a young girl in chains, about to be sexually abused by an unknown man. The girl in the flashbacks is Alice herself, who was kidnapped from her home eight years ago. Alice was left chained up for two months in the basement of the same farmhouse "Kristen" had burned down; in order to survive the past torture, she created different personalities. Alice is suffering from multiple personality disorder, creating Tammy, Zoey, Sarah, Iris and Emily. Over time, Alice's own personality became so overwhelmed by that of the others that she became lost. Through experimental techniques, Dr. Stringer had the zombie "Alice" killing the other personalities one by one until only her original personality remained. He explains that her treatments were working until "Kristen" appeared, yet another invention of Alice's mind to protect itself from reliving the trauma at the farmhouse. After this revelation, Alice's ghost appears and throws herself and "Kristen" out of the window, reawakening Alice.

Alice's parents, who she had seen earlier in Dr. Stringer's office, come to take her home because she is finally fully treated. After gathering her belongings, Alice takes one last look around her room. Upon opening her cabinet, "Kristen" suddenly comes out and attacks her.

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