A single mother gives her son a beloved doll for his birthday, only to discover that it is possessed with the soul of a serial killer.
Their car breaks down and four friends find themselves stranded at The Lost Oasis, a strange museum run by the friendly Mr. Slausen. Even though they are warned not to, the teens explore a house nearby and learn that it belongs to Davey, Mr. Slausen's insane brother. Davey has a knack for making mannequins. In fact, his house is filled with them. Davey's enthusiasm shows when starts adding the teenagers to his collection.
A group of people stop by a mansion during a storm and discover two magical toy makers, and their haunted collection of dolls.
Toulon, a puppet maker, discovers an ancient Egyptian potion and uses it to bring his creations to life. His puppets become murderous little demons and escape. Distraught, the master takes his life. Years later, psychics tune into the existence of the monstrous marionettes and set off to stop them.