In 1986, Carl calls demonologist Elise Ranier to help discover what is haunting Lorraine Lambert’s son, Josh. After hypnotizing Josh, Elise attempts to find the location of Josh’s “friend”, an old woman who appears in photographs of him. She makes her way to his bedroom closet and is clawed on the arm. When they return to Josh, he stands up in a trance, and says, “I’ll show you,” before walking to a door and pointing at it as he seemingly telekinetically opens on his own. Lorraine, Carl and Elise agree that making Josh forget his astral projection abilities is the best thing to do.
Twenty-five years later, Josh’s wife Renai is under questioning by a detective about the death of Elise as seen in the first film. He asks her about the person in the photograph taken by Elise moments before she died, and warns Renai that if Josh’s fingerprints match the fingerprints found at the scene, he will be in trouble.
Josh and Renai, along with their kids, relocate to Lorraine’s house as the police investigate Elise’s death. One night, Renai follows the sounds of a piano, only to find a music box. After settling her infant daughter, Kali, in bed, the piano begins to play again, although no one is found at the piano. Kali begins to cry and Renai finds her outside of her crib. She confronts Josh about this, but he suggests letting it go so that they can try to live a normal life again.
Specs and Tucker visit Elise’s house and discover the “Lambert, Josh 1986” videotape amongst her work collection. Upon reviewing the tape, they find someone standing behind Josh in the video. Lorraine visits the children’s bedroom where Dalton is sleep-talking, saying that someone is standing behind her. Lorraine eventually sees a woman in a white dress while looking in a mirror, but only finds Josh when she goes looking for her.
The next morning, Dalton tells Renai that he has been having bad dreams again, involving a woman in a white dress; as well as hearing Josh talk to an unseen figure in the hallway. While Josh takes the children to school, Renai receives a call from the police stating that the fingerprints do not match Josh. Her relief is disrupted by the presence of the woman in the white dress, who imitates Kali’s cries. Renai finds the woman and is knocked unconscious. Josh finds Renai unconscious and hears a voice urging him to kill his family in order to stay alive.
Lorraine visits Elise’s colleagues, Specs and Tucker, to seek an explanation behind the strange events. They show her the tape from 1986, enhanced to show adult Josh as the figure standing behind Josh. They contact Carl, who attempts to contact Elise using word-dice. Through the dice, they are told to find answers at the now abandoned “Our Lady of the Angels” hospital, where Lorraine used to work as doctor. The group visits the now abandoned hospital, and Carl sees things while entering a particular room. Lorraine recounts the story of a patient named Parker Crane who was admitted to the hospital, in that room, for trying to castrate himself. In a flashback, young Josh visits Parker in the hospital along with Lorraine, and is attacked by him. Two days later, Lorraine meets Parker in an elevator and apologizes for Josh and asks him to stay in his bed, but Parker doesn’t respond at all. Upon exiting the elevator, Lorraine talks to a nurse asking why Parker is out of his bed. The nurse looks confused and explains to Lorraine that the patient in Room 104, Parker Crane, jumped to his death the day before.