In 2006, Katie (played by Katie Featherston) and her boyfriend, Micah (Micah Sloat), are a young couple who recently moved into a two-story tract house in suburban San Diego, California. Katie claims that a ghostly presence has haunted her since her childhood and believes that it has followed her to their new home. She hires a psychic, Dr. Fredrichs (Mark Fredrichs), who assesses that she is being haunted not by a ghost, but by a demon. He says the demon feeds off negative energy, and its intent is to haunt and torment Katie no matter where she goes. Before leaving, he advises them not to taunt or communicate with the demon, and to contact demonologist Dr. Johann Abrams for help. Instead, each night, Micah mounts a video camera on a tripod in their bedroom to record any paranormal activity that might occur while they sleep in the hopes of solving the problem himself.
The camera manages to capture several supernatural phenomena which remain minor at first, including the bedroom door moving by itself, and the sound of rapid footsteps downstairs. As Micah consistently taunts the demon, the phenomena gradually grow worse, including loud bangs and strange noises reverberating from deep within the house. One night, Katie awakens to spend several hours standing by the bed staring at Micah while he sleeps before going outside to sit on the backyard swing. (Such long stretches of time, which occur several times in the film, are typically shown on screen in fast motion, as if the recording is being fast-forwarded.)
Micah awakens and goes in search of her, but when he tries to convince her to come inside she refuses, her voice dreamlike and detached. When Micah goes inside to get her a blanket, he finds the TV turned on in the bedroom and is then startled by Katie, who has followed him inside but says that he woke her up. Micah shows Katie the recording in the morning, but she has no recollection of any of it, including the conversation they had at the swing. Katie, already irritated by Micah's flippant response to the situation, becomes irate when Micah brings home a Ouija board despite Dr. Fredrichs' warnings. While the two are out of the house, the Ouija board's planchette moves on its own and a small fire erupts on the board, extinguishing itself moments later. The next night, Micah sprinkles talcum powder in the hallway and when the couple is again awoken by noises, they find non-human footprints leading to the bedroom from the attic. In the attic, Micah finds a burnt photograph of a young Katie, which was previously thought to have been destroyed in an unexplained house fire.The morning after a particularly intense haunting, a loud bang is heard and they discover the glass over a photo of them has been smashed with Micah's image scratched underneath.
Dr. Abrams is abroad when Micah finally agrees to invite him, so Dr. Fredrichs comes instead. Upon his arrival, Dr. Fredrichs immediately has a sense of dread. He apologetically leaves despite their pleas for his help, stating that his presence is only making the demon angry. Two nights later, Katie is dragged out of bed and down the hallway by an invisible force. Hearing her screams, Micah gives chase and seizes her back and Katie begins sobbing; the next morning they discover a gruesome bite mark on her back. Stressed and exhausted, the couple decide to go to a hotel. Later, Micah finds Katie gripping a crucifix so tightly that it bloodies her palm. Micah, angry at a situation he cannot control, burns the crucifix and the picture found in the attic. Just as Micah is set to leave, a suddenly apathetic, languid Katie insists they remain at the house, causing Micah to storm out of the room in anger. Once alone in the room, Katie says, in unison with a second, unidentified voice (as if she has been possessed), "I think we'll be okay now". She then closes her eyes and forms a smile, as if she is fast asleep.
Later that night, Katie awakens to once again stand and stare at Micah while he sleeps. She does this for approximately two hours and then walks downstairs. After a moment of silence, Katie lets out a blood-curdling scream of Micah's name, waking Micah who rushes to her while the camera records what sounds like a struggle downstairs. The screams abruptly stop, and a brief silence is followed by the sound of heavy footsteps coming up the stairs. After another brief silence, Micah's body is violently hurled at the camera, knocking it over sideways and revealing Katie standing in the doorway. She then slowly walks into the room, her clothing soaked with blood. Crouching over Micah's body, she sniffs him and then slowly looks up at the camera with a sly smile. As she lunges toward the camera, her face takes on a demonic appearance just as the scene cuts to black.
An epilogue text states that Micah's body was discovered by the police on October 11, 2006, and that Katie's whereabouts remain unknown.
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