A newlywed couple moves into a haunted house with their young daughter only to discover the former tenants who died in an arson attack never moved out. DANNY HELMS and his wife MANDY love their run down arts and crafts home. While moving in the first day they find their daughter Ashley setting a doll table for three. When asked what she is doing the child replies, 'having tea with Gladys and Mary. They're ghosts.' Danny plays in a local band but wants to write his own music. Two drug addicts LARRY and WALLACE COLTON confront him at the bar when he spots them selling heroin in the bathroom. They threaten to break his hands unless Danny ignores their free enterprise. Danny and Mandy leave the club after a phone call informing them Ashley is deathly ill with pneumonia because of the drafty old house. They rush their daughter to the hospital where her little body is packed in ice to break the fever. Police officer BILL WEST pulls JULIO TORREZ and JUAN VASQUEZ over in a low rider. Juan is forced to shoot the policeman as a gang initiation. Bill is then taken to the same hospital Ashley is in where they both die. After Danny is fired from his night club gig, Mandy blames him for not being home to take care of Ashley while she was sick. Danny becomes possessed by the dead arsonist who has invaded their home with a gang of restless spirits and demons. Danny takes a day time job at a local steel mill called Vulcan Forge. A demon flies out of the flames then attacks him. The company doctor warns Danny against suing the mill owner then prescribes a restful vacation. Being exhausted and tortured by Ashley's death Danny and Mandy take a strange bus trip into the unknown and find old friends waiting for them. They're all dead.