The film tells the story of Los Angeles firefighter Gordon Brewer (Schwarzenegger), who seeks to avenge his son's and wife's deaths at the hands of a guerrilla commando, by traveling to Colombia and facing his family's killers.

Brandt angrily returns to Mompós and meets with his paramilitary allies to plan a major offensive to take down Claudio.

Frustrated at the political red tape regarding the investigation, Brewer travels to Mompós to personally hunt down Claudio but is quickly arrested for illegal entry.

Brewer breaks out of the prison, evades capture, and secures a guerrilla zone pass from Canadian mechanic Sean Armstrong.

Armstrong introduces him to drug runner Felix Ramirez, the manager of the cocaine distribution facility that finances the guerrillas.

Brewer infiltrates Claudio's headquarters and plants a bomb to kill him, but he is captured when he tries to prevent a woman, Selena, from being caught in the blast radius along with her son, Mauro.

When Brewer sees Selena make the same gesture as the masked man who claimed to be El Lobo in the tape, he realizes that she was the Wolf all along, and Claudio serves as her figurehead, and that the entire motive behind their cause is personal revenge for the death of their daughter at the hands of the US.

After a short, hand-to-hand fight, Selena is electrocuted by being tossed on the exposed circuitry of the control panel, and Claudio is himself killed when Brewer throws an axe into his chest before he can detonate a second bomb in the State Department.

A newscast voiceover explains that Brewer will receive the Presidential Medal of Freedom for preventing one of the worst terrorist attacks in U.S. history from taking place.

The original script for the film had the same plotline but would have addressed American policy in the Middle East by taking place in Libya; director Davis and his screenwriters chose Colombia as the new location because it had not been used as extensively and touched on a current geopolitical conflict area.

[11] For its second weekend, the film dropped into fifth place behind John Q., Crossroads, Return to Never Land and Big Fat Liar, making $8.7 million.

[17] Desson Howe of The Washington Post called the film "head-scratchingly ordinary" and wrote, "Even by the fast-and-loose standards of action filmmaking, Collateral Damage is a disappointment.

"[18] Claudia Puig of USA Today said, "It's laughably unbelievable, yet it's hard to snicker at anything involving terrorists, even Collateral's obscure Colombian variety.