Plot

Art the Clown is set to unleash chaos on the unsuspecting residents of Miles County as they peacefully drift off to sleep on Christmas Eve.

Five years after surviving Art the Clown's Halloween massacre, Sienna and Jonathan are still struggling to rebuild their shattered lives. As the holiday season approaches, they try to embrace the Christmas spirit and leave the horrors of the past behind. But just when they think they're safe, Art returns, determined to turn their holiday cheer into a new nightmare. The festive season quickly unravels as Art unleashes his twisted brand of terror, proving that no holiday is safe.

After being decapitated by Sienna Shaw, Art the Clown's headless body kills a cop responding to the incident and makes its way to the asylum where survivor Victoria Heyes, now possessed by the Little Pale Girl, has just given birth to his head. They kill a nurse and a guard before fleeing to an abandoned house. Victoria smashes her face into a bathroom mirror, using a shard of broken glass to slit her wrists, entering hibernation in a bathtub, while Art sits in a rocking chair in the attic; the two become dormant.

Five years later, Sienna is released from a mental health center to stay with her aunt Jess, who lives with her husband Greg and their daughter Gabbie, who idolizes Sienna but has no knowledge of the events she endured. Sienna is suffering from survivor guilt and frequently has hallucinations of her deceased best friend Brooke, whose death[a] she feels responsible for. She struggles to reconnect with her younger brother Jonathan, who is now in college trying to move on with his life. Art and Victoria are woken from their slumber when two demolition workers stumble upon them in the house. The duo kills the workers, and Victoria begins working on a costume, while Art ventures off on another killing spree. Art meets a Santa Claus impersonator at a bar, shoots the bartender and another patron, puts on his Santa costume, and murders him using liquid nitrogen and a hammer. Art invades the home of a family dressed as Santa and brutally murders them with an axe a few nights before Christmas. Art then impersonates a Santa at a local shopping mall and uses explosives disguised as gifts to slaughter several shoppers, including children. Sienna thinks she sees Art at the mall in disguise before the explosion, but does not tell her family since she thinks they would not believe her and is unsure herself if it was simply a hallucination or not.

Sienna visits Jonathan at his university, where she meets Jonathan's roommate Cole and his girlfriend Mia, who hosts a true crime podcast. Mia pressures Sienna and Jonathan to participate in an interview about the Miles County Massacre, but Sienna lashes out. Sienna confesses to Jonathan that she thinks Art is still alive, and shows Jonathan the letters he wrote to her while she was in the psychiatric hospital, which state that demons can be reborn through recently deceased evil humans (like Art after he kills himself) and possess hosts whose will was broken by a reborn demon (like Victoria). She also tells Jonathan she plans to return to the Terrifier haunted attraction to retrieve her father's sword. Art arrives at the university and kills Mia and Cole with a chainsaw while they are having sex in the showers. Sienna learns about the mall killings on the news and panics, demanding Jonathan return home from college and warning the family they are not safe. Greg leaves to collect Jonathan while Sienna falls asleep; she dreams about angels crafting the armor from her warrior costume that her father drew for her. She wakes and heads downstairs to find Art and Victoria (now dressed in a clown costume), and Art incapacitates her with a mallet.

As Sienna regains consciousness, she sees Greg's decapitated body pinned to the wall, with his head as the star on their Christmas tree, and Jess tied up across from her. Victoria shows them a skinless head being consumed by rats, telling her it is Gabbie's. Art kills Jess by hammering a tube into her mouth, forcing the rats down it with a blowtorch, then slitting her throat. Art suddenly enters with Gabbie as a hostage, and Victoria reveals to Sienna that the head is Jonathan's. Victoria places a crown of thorns on Sienna's head and tries to possess her, but she resists because her will is not yet broken. She tricks them into letting her open a "Christmas present" she wrapped, stabbing Victoria with its contents, her father's sword. Sienna decapitates Victoria, who disintegrates. Art attacks Sienna with his chainsaw, but she gains the upper hand. Victoria's blood burns through the floor and creates a portal to Hell. Gabbie falls in and holds onto the edge. Sienna leaves Art behind to save her, but Gabbie falls into the abyss with the sword. Art flees through a window and escapes on a bus, while Sienna, whose wounds supernaturally heal, vows to find and rescue Gabbie.