Pinhead dusts off and opens André Toulon's casket, then climbs out and pours a vial of neon liquid on the corpse, while Tunneler, Leech Woman, Blade and Jester watch on from the grave’s edge as the skeleton’s arms rise into the air.

A few months later, parapsychologists Carolyn Bramwell, her brother Patrick, and the flirtatious Lance and Wanda, are sent to the hotel to investigate the strange murder of Megan Gallagher, whose brain was extracted through her nose by Blade.

Their guest psychic, Camille Kenney, decides to leave after spotting two puppets in her room and warning the others they aren't safe; however, while packing, Pinhead and Jester attack and kidnap her.

The next morning, a man named Eriquee Chaneé (the reanimated Toulon in disguise) enters the hotel, stating that he had inherited it after Megan's death, and that he has just returned from Bucharest.

Blade takes a piece of her charred remains and he and Torch return to Eriquee/Toulon where it's revealed he believes that Carolyn is a reincarnation of his now deceased wife, Elsa.

After her soul has been placed into the female mannequin, the 'revived' Camille decides to drive the puppets to the Bouldeston Institution for the Mentally Troubled Tots and Teens in her car, so they can "enchant" the children.

In a contemporary review, Variety described the film as "okay followup to the gory William Hickey-starrer" and that the "Use of stop-motion puppet effects should please genre fans.