Medical student Grace Rhodes (Naomi Watts) returns to her hometown of Grand Island, Nebraska, to take care of her agoraphobic mother June (Karen Black), who refuses to leave her yard. She is having recurring nightmares of being attacked by children. Grace must also look after her younger siblings, James and Margaret. She takes a job at Dr. Larson's local clinic, where she'd worked before. James and Margaret become ill, showing similar symptoms to those of the children in June's dreams. While working at Dr. Larson's office the next day, Grace notices that many other kids have the same symptoms. During the night all of the kids get worse as their fevers skyrocket. Suddenly it all stops and the fevers drop.

Local parents Donald (Brent Jennings) and Sandra Atkins notice that their son Marcus is acting strangely. One night, a group of children descend upon the house, led by a child preacher, and Sandra is murdered in front of Marcus. The police arrive and question Donald; Marcus flees into a field and is chased by the sheriff, whom the child preacher confronts and kills. A suspect in his wife's murder, Donald goes into hiding and is taken in by two elderly sisters, Jane and Rosa (Marietta Marich).

The children stop answering to their names and claim to be other people; longtime resident Dr. Larson recognizes the names they use as those of dead children from the town's history. One night, he is killed in his office by two children. When Grace arrives the next day, his body has vanished, and the children's blood tests reveal inexplicable signs of decay and death. June's recurring nightmares start up again—but she is not dreaming; it's all actually happening. She flees her house and drives away; spotting James entering an old barn, she follows him inside. She is captured and killed by the child preacher, after which children gather at the barn.

Grace decides to go to Dr. Larsen's house to find him. Donald hijacks her and her car and forces her to drive at gunpoint. They go to Jane and Rosa's house. Rosa reveals that the child preacher, Josiah, was the bastard son of a local woman. He was taken in by traveling preachers and became a gifted preacher. Over the years, Josiah stopped aging and never grew out of boyhood. The traveling preachers gave him over to darkness to stunt his growth, but when word got out, they abandoned him. Josiah killed the preachers, then the townspeople burned him alive and sealed his remains in a well.

Meanwhile, Mary Anne, Grace's best friend and co-worker, is attacked and killed by Josiah. Grace and Donald return to the clinic and discover that Margaret is missing, but they learn that Josiah's weakness is mercury. It is also revealed that Josiah is Rosa's son. Margaret, James, Marcus, and all the other children gather at the barn and offer blood to Josiah. Marcus is a hemophiliac, so he would bleed to death with even a small cut, but he cuts his hand and offers his blood to Josiah, and Margaret offers Josiah her soul. Marcus collapses from blood loss and Margaret is pulled into the pool of blood, from which Josiah emerges.

Donald and Grace arrive at the barn and connect its sprinkler system to their supply of mercury. Donald fills two of his bullets with mercury and gives Grace the gun. Donald stops Marcus' bleeding, but the children try to kill him. Josiah attacks Grace, but she shoots him with a mercury bullet. She then finds the bodies of June and Dr. Larson. Josiah attacks her again, but she activates the sprinklers, which shower him with mercury. Grace slashes him with his own scythe, finally killing him. The children stop trying to kill Donald and return to normal. Grace finds Margaret; she's nearly drowned, but Grace manages to revive her.

It is revealed that Margaret is actually Grace's daughter, and that she abandoned her with June as a teenager. After the victims' funerals, Grace, Margaret, James, Donald, and Marcus all move out of Nebraska.
Cast

    Naomi Watts as Grace Rhodes
    Jamie Renée Smith as Margaret Rhodes
    Karen Black as June Rhodes
    Brent Jennings as Donald Atkins
    Toni Marsh as Sandra Atkins
    Lewis Flanagan III as Marcus Atkins
    Mark Salling as James Rhodes
    Brandon Kleyla as Josiah
    Salle Ellis as Jane Nock
    Marietta Marich as Rosa Nock
    Jonathan Patterson as Charlie McLellan
    Joshua Patterson as Scott McLellan
    Kay Bower as Janet McLellan
    Samaria Graham as Mary Anne
    William Windom as Doc Rob Larson
    Adam Lidberg as Michael
    Libby Villari as Michael's mom
    Stephen Earnhart as Wilks
    James Krieg as Smits
    Richard Gross as Sheriff Biggs