The dramatic re-enactment follows Shelby's chase through the woods. She comes upon The Butcher and her village roasting the scalped man over an open fire after having hammered a "tail" into his rear end. He is accused by The Butcher of desertion, and hoarding stolen provisions. He screams through the pig's head placed on his head. The Butcher and her accomplice, a horned woman, spot Shelby and call for her seizure. Shelby is chased to the road where she is nearly run over by Lee.
At the hospital, Shelby is cleared of having hallucinogens in her system as she tells her story of human sacrifice. The investigating officers found no evidence of her tale. The next morning, she tells Matt that she thinks the mountain men created an elaborate hoax to drive them away from the property, and that she and Matt will not be driven from their new home and investment so easily.
Lee's testimonial expounds on her custody arrangements as her ex-husband Mason brings Flora for a visit. Flora begins exploring the house and talks to an unseen Priscilla, whom Lee believes is an imaginary friend. Flora relays that Priscilla offered to make for her a bonnet if the family will help make "all the blood" stop. Soon after, Lee finds a bonnet amid a broken vase.
Shelby is wary of Lee's choice to let Flora visit, and Matt wants to fight for their homestead until they have an opportunity to sell. Later, Shelby awakes to hear a pig squealing outside, and she and Matt travel into the woods. They get separated, and both get lost. Shelby happens upon the sacrificial fire, and they unite to find roasting meat and a wooden effigy, which Matt destroys. Matt directs the police to the site, and they post a bulletin for Ishmael Polk and his sons and set up a protective detail for the Millers.
A late night phone call (to an unplugged phone) wakes Matt and leads him downstairs. The voice on the other end says "Please, they're hurting me." Matt immediately experiences a vision of two nurses executing an old woman (with a shot to the head) for refusing to take the offered poisoned medicine. The nurses laugh and decorate the already blood-spattered walls with a spray-painted "M" (which they laugh is for "Margaret").
Matt is terrified by his vision. He screams at the officer posted outside about an intruder, but all evidence of Matt's kitchen vision is gone. Matt questions whether he had neurological damage from his attack. Lee is concerned that the police will think they are crying wolf.
Mason arrives to pick up Flora, who is playing "hide and seek" inside an under-stair cupboard with Priscilla. Flora offered the now-vanished Priscilla her doll in exchange for not killing the family. With the trade blown, they will merely kill her last. Upon hearing this, Mason quickly extracts Flora with the admonishment that Flora will never return.
Lee ends her sobriety, and Matt finds her on the kitchen floor. The kitchen knives are impaling the kitchen's high ceiling. Shelby calls after Matt to confirm that there is indeed a woman outside the window; the spouses leave track the apparition to a cellar under a trapdoor while the ghostly nurses watch over Lee. Lee experiences being watched, and leaves her bed to see twitching bloody "pig" tails nailed to the wall. She stumbles backward and catches sight of the Piggy Man in a mirror.
Meanwhile, Shelby and Matt investigate the cellar and find a VHS camera with an intact tape. The man on the tape (Elias Cunningham, 1997-10-11) describes the same malevolent forces pursuing him that the couple has been experiencing, and that he was studying the story of the nurses, Miranda and Bridget Jane. The sisters killed their retirement home patients based on the first letters of the victims' names, spelling the unfinished word "murder". Subsequent tenants experienced the word's constant reappearance on the wall, and Matt runs to uncover the same word from the kitchen lying beneath the wallpaper. Cunningham goes on to describe that the dark forces of the house and woods were what stopped the nurses, and continues to document paranormal activity inside the house. The final image on the tape is him being surprised by a woman behind him in a mirror. A sudden noise causes Matt and Shelby to flee the room, where they find a bloody cleaver freshly wedged in the swinging door.
The bank refuses to refund them their investment for the property, who warns them that the auction of the property absolves the bank of responsibility. The bank's agent leaves as Lee arrives, having absconded with Flora in violation of the custody arrangement. Shelby draws Flora away so that Matt can discuss Lee's actions with his sister. Shelby speaks to Mason on the phone, trying to smooth over the situation that Lee knows she botched. Meanwhile, Flora sees her friend beckoning her outside.
The adults search the woods and find only Flora's hoodie at the top of a tree, at least a hundred feet over their heads.
- The Butcher: "I am the queen of every hive. I am the fire on every hill. I am the shield over every head. I am the spear of battle. Who but I am both the tree and the lightning that strikes it."
- Is the house haunted or is just a Polks' prank?
- Who's "The Butcher"?
- Who's Priscilla?
- Who's the man on the VHS tape?
- Where's Flora?