Ash awakens in a run down hospital room. He is approached by Baal who has taken on the guise of Dr. Peacock, and claims to be Ash's psychiatrist.
Dr. Peacock attempts to convince Ash to accept the fact that everything that has happened to him up until this point has been a delusion. Pablo, Kelly and Ruby along with the Necronomicon and his history of demon hunting never existed, and it was Ash who murdered everyone in the cabin 30 years prior.
Ash quickly balks at the idea and attacks the doctor, who stabs Ash in the neck with a sedative.
Ash wakes back up in the hospital bed and the doctor introduces Ash to a puppet of himself named Ashy Slashy. The puppet is meant to be the sane part of Ash's psyche, and the two begin arguing. Ash eventually flings the puppet and flees the room, looking for an escape from the hospital.
Ash happens upon an unlocked room and encounters another patient who looks like Kelly, but she has not recollection of Ash and says they have all been locked up for what seems like forever.
Their conversation is cut short when an orderly, who has the appearance of Pablo, barges threw the door. Pablo subdues Ash as Dr. Peacock shows up and decides to subject Ash to electro shock therapy.
During Ash's shock therapy, Chet appears on a gurney next to him, also receiving chock treatment. Chet tries to convince Ash that he murdered everyone, and is eventually killed by electrocution.
Later on in the break room, Ash attempts to talk to Ruby, who is a nurse tending to a patient. Ruby quickly rebuffs Ash's attempt at talking to her and leaves. With Kelly's help, Ash orchestrates a riot and is able to snatch a key card from one of the orderly's as they subdue him.
Ash later plans an escape from the asylum with the help of Kelly. As they approach the gate in the hall to leave, Ash finds that the key card does not work. He turns around and finds Kelly has killed the orderly that looks like Pablo. As Ash reprimands her for killing their friend, Kelly begins attacking Ash. As more orderly's approach, Ash suddenly finds Kelly dead as well, but her and Pablo's dead bodies have swapped to different people.
Ash is caught and then forced to watch survaillance footage of himself murdering the people in the hall from moments earlier. Ash not fully sure of himself anymore, insists that it is not him.
Dr. Peacock tells Ash that he is being transferred to a different facility. In a last ditch effort for Baal to break Ash, he then brings in Linda, who is able to finally convince Ash to accept that he commited the crimes.
Much to Baal's pleasure, he releases Ash who is now under his full control. Baal tells Ash that he must destroy the Necronomicon.