Plot
In 1931 Los Angeles, the staff of the Vannacutt Psychiatric Institute for the Criminally Insane (headed by the sadistic Dr. Richard B. Vannacutt; a psychiatrist conducting cruel and torturous medical experiments) are under attack during a revolt by the patients. A fire erupts, killing Vannacutt, the inmates, and all but five of the staff.
In 1999, Evelyn Stockard-Price is in a disintegrating marriage with Stephen Price, an amusement park mogul known for his elaborate pranks. At Evelyn's insistence, Price stages her birthday party at the abandoned hospital, which has been partly converted into a residence. Five guests arrive: baseball player Eddie Baker; former television personality Melissa Marr; physician Donald Blackburn; Sara Wolfe, a production assistant impersonating her former boss, Jennifer; and Pritchett, the building's owner. The guests are not the ones Price invited and neither of the Prices know who they are. Despite this, Price continues the party's advertised theme, offering $1 million to each guest who remains in the house until morning; those who flee or perish forfeit their $1 million to the others.
The building's security system is tripped, locking everyone inside – a stunt which Price and Evelyn blame on each other. Sara, Eddie, and Pritchett search the labyrinthine basement for a control panel. Sara becomes separated from Eddie and is nearly pulled into a tank of blood by a doppelgänger impersonating him. Melissa disappears, leaving behind a trail of blood and a camcorder showing her apparent murder. Price visits his assistant Schechter, who is overseeing the party stunts, but finds him horribly mutilated. On the surveillance monitor he sees an apparition of Dr. Vannacutt armed with a bloody saw.
Evelyn seemingly dies in front of the others, strapped to an electroshock therapy table. Price pulls a gun on the guests, demanding to know who killed his wife, before they turn on him and lock him inside the "Saturation Chamber", an archaic zoetrope device that Vannacutt used to treat schizophrenics. Blackburn volunteers to guard Price. When the others leave, he turns the chamber on, leaving Price to be tortured by the moving images. In Vannacutt's office, Sara and Eddie find a portrait of the hospital's staff and realize that the Prices and invited party guests, with the exception of Blackburn, are descendants of the five survivors of the 1931 fire. Sara surmises that the spirits hacked Price's computer and altered the guest list.
Blackburn and Evelyn are revealed to be lovers who faked Evelyn's death, plotting to frame Price and hoping one of the guests will kill him in self-defense. Fearing the guests are not yet motivated to turn on Price, Evelyn kills Blackburn, then frees a delirious Price. Sara, Eddie, and Pritchett discover Evelyn's body is missing and return to the chamber, where they find Blackburn's decapitated corpse. After Sara shoots Price in the basement, Evelyn comes to gloat over his body, but Price, protected by a bulletproof vest and posing as dead, attacks her. As they scuffle, Evelyn is thrown through a decaying door, unleashing an evil, amorphous entity composed of the spirits of the house.
The shape-shifting entity consumes Evelyn, killing her and adding her spirit to its mass. Price then discovers Melissa's dismembered body. The entity pursues Price up the staircase before engulfing Pritchett. Price has a sudden realization that the attic might house the mechanisms used to operate the lockdown system and flees there, followed by Sara and Eddie. Price opens an iron window guard in the attic, then sacrifices himself to give the others time to flee. Sara narrowly escapes, but the entity traps Eddie inside.
As the entity menaces Eddie, he reveals he was adopted and, like Sara, not a descendent of the hospital staff. Pritchett's ghost opens the window guard, allowing Eddie to escape. Seated on the ledge, Eddie and Sara find an envelope containing all five checks, made out to cash and signed by Price. The two laugh hysterically before wondering how to get down from the ledge.
In a black-and-white post-credits scene, the spirits of the 1931 patients are seen torturing the Prices, presumably doomed to eternal damnation in the afterlife.
