Shelby, still lost in the woods, watches as the colonists, led by a woman called "The Butcher," tie a man with a pig's head onto a stick and roast him alive over a fire in what seems to be a ritual of human sacrifice. Shelby snaps a twig, drawing attention to herself but gets away before the group can get her. Lee nearly hits her with her car and brings her to the hospital. Matt visits Shelby, apologizing and offering to move. Shelby no longer wants to, insistent that it was an elaborate hoax by the mountain men and telling Matt that they cannot let themselves be driven out.
Lee's ex brings their daughter Flora to stay with her at the house. They play jumping jacks but Flora disappears when Lee steps away to make her lunch. She finds Flora talking to an invisible "friend" she says is called Priscilla. When Lee asks what they were talking about, Flora explains that Priscilla promised to make Flora a bonnet just like hers if they help Priscilla to "make it stop" because Priscilla is tired of all the blood. Lee is unnerved and goes to investigate a glass shattering noise. She finds an open window, a vase shattered, and a bonnet next to it.
The inhuman pig squealing noises start up again in the middle of the night. Shelby and Matt go outside with flashlights and end up getting separated from one another. They find one another once they both stumble upon strung up, burning pieces of pig in the woods. They call the police, who promise that they are working on tracking down Ishmael Polk and his sons. Shelby is upset by the inaction and threatens to go public if the police don't offer them protection. The cop agrees to put a squad car on them.
In the middle of the night, Matt is woken by the phone ringing. When he answers it, a woman asks him for help and to make "it" stop, telling him that he's letting them hurt her. Matt notices that the phone's cord is actually cut -- it's not connected to anything. He then hears a woman refusing to take her medicine and walks into the next room. There, he sees two deranged nurses taunt an old, enfeebled woman named Margaret lying in bed and then shoot her callously right through the head after telling her that she's been warned. They laugh hysterically and then one of the nurses spray paints an M for Margaret onto the wall.
Matt runs outside to wake up the cop sleeping in the car outside, telling him that someone broke in and telling him about what he saw. The cop investigates and Lee and Shelby, having woken up, come downstairs as well. They find nothing there and the cop suggests he was dreaming. In present-day, Matt comments that he thought he might have suffered neurological damage and hallucinations due to the attack.
Lee's ex Mason comes to pick Flora up, but Flora is playing her "special version of hide and seek" where she hides without telling anyone that she was hiding. They find her hiding where she was first talking to Priscilla. When asked what she was doing, Flora tells them that she was offering her doll Mandy to Priscilla (who disappeared as soon as Flora's parents opened the door) so that Priscilla wouldn't kill them all. Flora warns that they're going to kill the whole family and save Flora for last. Mason angrily drags Flora out of the house, telling Lee that he is going to the judge and that Flora will never come back to that house.
That day, Lee falls off the wagon. Shelby and Matt find her, completely wasted. They also find knives stuck in the ceiling, which Lee claims she didn't do. Matt puts her to bed. Shelby calls to Matt. Matt leaves Lee alone and as soon as he does, the two ghostly nurses approach Lee's bed.
Shelby and Matt both spot a young girl through the window. They go outside to investigate, but she is gone. They find a hatch to a cellar and begin to descend the ladder into it. Meanwhile, Lee awakens and briefly sees the two nurses before they vanish. She goes to check the rest of the house, spotting a horrifying vision of bloody pig tail's wagging on the wall and a squealing pig-headed man, both of which quickly disappear.
Shelby and Matt go downstairs into the cellar and find provisions, a camera, and a video taped confession of a professor named Dr. Elias Cunningham, dated October 11, 1997. On the tape, Elias (who was also on the tape that Lee and Shelby found previously) explains that he came to the house to research his true crime book about two murderous nurses. While there, he encountered a sinister presence.
He also tells the story of the two nurses, Bridget and Miranda, who Matt saw. They were murderers and opened up an assisted care facility in the house in 1989 so that they could kill elderly patients whose first names spelled out "Murder." Shelby and Matt find the letters still on the wall behind their wallpaper. The nurses disappeared before killing the last "R" victim. Elias was sure that "something" malevolent had stopped them. He reports that he is going to go back into the house, not knowing if he'll survive it. He takes the camera into the house and Matt and Shelby see a woman creep up on Elias in the video before the sound of a bloodied butcher knife hitting their door draws them away.
Shelby and Matt contact the bank and try to convince them to take the house back, claiming they were victims of fraud. The bank representative refuses to take it back, claiming that the Millers agreed to buy the house as-is. He leaves.
Just then, Lee arrives back at the house with Flora, much to Matt and Shelby's shock. Matt tells Lee that she technically kidnapped Flora and tries to convince her it was a bad idea. Mason speaks with Shelby, who assures him that Flora is safe. He tells her that he's going to pick Flora up. While the adults are talking, Flora is lured outside by the ghostly little girl (Priscilla). The adults try to find her but Flora has vanished. In the woods, bloody pig tails are nailed to the tree. Lee finds Flora's jacket on a branch high up on a tree, but no Flora.