On October 30, Devil's Night in Detroit, Sergeant Albrecht is at the scene of a crime where Shelly Webster has been beaten and raped, and her fianc�, Eric Draven, lies dead on the street after being stabbed, shot, and thrown out the window. The couple had planned on getting married the following day, Halloween. As he leaves for the hospital with Shelly, Albrecht meets a young girl, Sarah, who says that she is their friend, and that they take care of her. Albrecht tells her that Shelly is dying.
One year later, a crow taps on the grave stone of Eric Draven; Eric awakens and climbs out of his grave. Meanwhile, a low level street gang, headed by T-Bird, is setting fires in the city. Eric goes to his old apartment and finds it derelict. He has flashbacks of the murders, remembering that those responsible were T-Bird and his gang: Tin Tin, Funboy and Skank. Eric soon discovers that any wounds he receives heal immediately. Guided by the crow, he sets out to avenge his and Shelly's murders by killing the perpetrators.
The crow helps Eric locate Tin Tin; Eric kills him and takes his coat. He goes to the pawn shop where Tin Tin pawned Shelly's engagement ring. Eric forces the owner, Gideon, to return the ring and blows up the shop with gasoline, letting Gideon live so that he can warn the others. Eric finds Funboy with Sarah's mother, Darla. After killing Funboy, Eric talks to Darla, making her realize that Sarah needs her to be a good mother. He visits Albrecht, explaining who he is and why he is here. Albrecht tells him what he knows about Shelly's death and that he watched as she suffered for thirty hours before dying. Eric touches Albrecht and feels the pain Shelly felt during those hours. Sarah and her mother begin to repair their strained relationship. Sarah goes to Eric's apartment and tells him that she misses him and Shelly. Eric explains that, even though they cannot be friends anymore, he still cares about her.
As T-Bird and Skank stop at a convenience store to pick up supplies, Eric arrives and kidnaps T-Bird. Skank follows the pair and witnesses Eric kill T-Bird; he escapes and goes to Top Dollar, a top-level criminal who controls all the street gangs in the city. Top Dollar and his lover/half-sister Myca have become aware of Eric's actions through various reports from witnesses. Top Dollar holds a meeting with his associates where they discuss new plans for their Devil's Night criminal activities. Eric arrives looking for Skank. A gun fight ensues, killing nearly everyone there, and Eric kills Skank. Top Dollar, Myca and Grange, Top Dollar's right-hand man, escape.
