Suburban homeowner Ray Peterson is home on a week-long vacation. Late one night, he hears strange noises coming from the basement of his new and reclusive neighbors, the Klopeks.
Ray and his other neighbors—nosy Art Weingartner, Vietnam War veteran Mark Rumsfield, and teenager Ricky Butler—gradually suspect the Klopeks may be ritualistic murderers.
On another night, they observe the youngest Klopek cart an oversized garbage bag to their curbside garbage can and aggressively mash it down. Later that night, during a rainstorm, Ray sees the Klopeks digging in their backyard.
In the morning, Ray, Mark, and Art search the garbage truck for human remains after the Klopeks’ trash is collected, but find nothing. Mark’s wife Bonnie finds their neighbor Walter’s dog Queenie running loose.
Worried about the elderly man, Ray, Art, Ricky, and the Rumsfields enter Walter’s house and find overturned chairs and Walter’s toupée, but no Walter.
Ray collects Queenie, leaves a note for Walter, slips the toupée back in through the mail slot, and sees one of the Klopeks watching him from their house.
Ray and Art theorize that the Klopeks may have used Walter as a human sacrifice, becoming further convinced when Ray’s dog Vince digs up a human femur from along the Klopeks’ fence line.
Ray’s wife Carol, tired of the men’s behavior, organizes a welcome visit to the Klopeks. While the Petersons and Rumsfields meet Hans, Reuben, and Dr. Werner Klopek, Art snoops around the Klopeks’ backyard and is chased out by their large dog Landrue.
Afterward, Ray reveals to Art and Mark that he found Walter’s mail and toupée at the Klopeks’, proving they had been in Walter’s house.
The next day, Ray sends Carol and their son Dave to visit Carol’s sister. When the Klopeks leave, Art and Ray enter their backyard to search for Walter’s corpse while Mark acts as lookout. Finding nothing in the yard, Art and Ray break into the Klopeks’ basement, discover what appears to be a crematorium, and dig deep into the floor in search of human remains.
The Klopeks return, accompanied by the police after having seen their basement lights on. Ray strikes a gas line with his pickaxe; Art escapes before the house explodes, and Ray emerges from the flames scorched and disheveled just as Carol returns home.
Walter arrives home during the commotion, having spent a few days in the hospital due to palpitations. He had asked the Klopeks to collect his mail for him, and they had mistakenly gathered up his toupée as well.
Ray declares that he and the others were wrong about the Klopeks, and climbs into an ambulance. Werner enters and accuses Ray of having seen a human skull in the basement furnace, revealing that the Klopeks murdered the previous homeowners so they could live in their house.
Werner attempts to lethally inject Ray as Hans drives the ambulance away. Their struggle causes the ambulance to crash into Art’s house, ejecting Werner and Ray, who then makes a citizen’s arrest. Ricky uncovers human skeletal remains in the Klopeks’ car trunk.
The Klopeks are arrested, and charges against Ray are dropped. Ray states that he and his family are going away for a while, and asks Ricky to watch over the neighborhood.
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