It is set in the Channel Islands on the eve of D-Day and tells the story of two New Zealand commandos who discover a Nazi occult plot to unleash a demon to win World War II.

On 5 June 1944, a unit of New Zealand commandos are sent to the Channel Islands on sabotage and distraction raids, to draw the German military's attention away from Operation Overlord, planned landings in Normandy.

That night, two New Zealand soldiers, Captain Ben Grogan and Sergeant Joe Tane, paddle in their Klepper canoe to Forau Island, landing on a beach covered in anti-personnel mines and tank traps.

While looking for Grogan, Tane discovers a book of black magic and, distracted by its contents, is killed by an unseen assailant.

Grogan attacks Meyer, who explains the woman is a demon, summoned from a book of black magic found on the island.

Grogan searches him and discovers a page torn from the book of black magic in a small pouch worn as a necklace.

Unable to complete the ritual alone, Grogan takes the book and leaves the demon behind, to prey on any Germans that come to investigate.

Special makeup effects for the film, including the elaborate prosthetics used to create the Demon, were supplied by Weta Workshop.

[citation needed] The film contains references to real historical events, and Campion has stated that he based the story on the German occupation of the Channel Islands.

As Meyer ties Grogan's thumbs with a piece of wire to torture him, Meyer talks about the Allied "gangster commandos, who raided these very islands and killed innocent German prisoners with their hands tied behind their backs", which is a reference to Operation Basalt, a British Commando raid on Sark during which a German prisoner was shot dead whilst his hands were tied, which in turn led to Adolf Hitler issuing his Commando Order, upon which the torture scene in the film is based.

Meyer also taunts Grogan by insulting the Maoris of New Zealand, which he describes as "the descendents of cannibals and headhunters", which is a reference to a 1940s German radio propaganda broadcast.