After years of being shuffled around various mental institutions, Tommy Jarvis has now been placed in the Pinehurst halfway house, one that is unique because it runs off an honor system. It is not made clear what happened to Tommy's sister, Trish, following the events of the previous film, but he apparently has no contact with her. Shortly after arriving, one of the patients murders another and is arrested. Soon afterwards, a series of murders begin to occur around the area. With Jason Voorhees dead, the identity of the assailant remains unknown. As the killings continue, the already strained mind of Tommy is plagued with memories of Jason. When the killer makes himself visible to the last few left in the halfway house, Tommy confronts what appears to be Jason, returned from the grave. However, when the killer lies dead and unmasked, it is revealed to be Roy Burns, a paramedic who had been using Jason's M.O. and identity to avenge the death of his son who was killed earlier at the halfway house. It is also revealed that Burns had placed his son up for adoption, and that he never knew him.
The final scene of this movie takes place in the hospital with Pam, the halfway house director, visiting Tommy as he recuperates. Tommy appears to be having delusions of Jason, and attacks Pam. Tommy then suddenly wakes up in his hospital bed, the previous attack having been a dream. He then walks to a dresser in the room, and pulls out a hockey mask. Pam then walks into Tommy's room to find Tommy gone, with the window smashed open, making it appear as though Tommy has run away. However, as the door closes behind Pam, Tommy is revealed, wearing the hockey mask, preparing to attack Pam, leaving the conclusion open-ended.