Months after the conclusion of the previous film, 10-year old Tina Shepard (Jennifer Banko) hears her alcoholic father physically abusing her mother. The emotional trauma unlocks Tina's previously latent telekinetic powers, which result in her father's death at the bottom of Crystal Lake. Ten years later, Tina (Lar Park Lincoln) is still struggling with guilt over her father's death.
Her mother, Amanda Shepard (Susan Blu), and her doctor Dr. Crews (Terry Kiser) take her from the mental institution that she has been in and out of in the hopes of treating Tina's overwhelming guilt. When in fact, Dr. Crews plans to study and to exploit Tina's abilities by keeping her stress levels high.
To make sure they are at their peak, Dr. Crews has them convene at their house at Crystal Lake where her father was killed. Despite suspicions of his true intentions, Tina allows herself to be subjected to the tests. Meanwhile, several teenagers are vacationing in the house next door setting up a surprise birthday party for their friend Michael (William Butler).
Included are brainy Maddy (Diana Barrows); perky Robin (Elizabeth Kaitan); science fiction writer Eddie (Jeff Bennett); socialite snob Melissa (Susan Jennifer Sullivan); the stoner David (Jon Renfield); the preppy Russell (Larry Cox) and his girlfriend Sandra (Heidi Kozak); and Ben (Craig Thomas) and his girlfriend Kate (Diane Almeida). Nick (Kevin Blair) is Michael's cousin and aside from that, hardly knows the others.
He becomes attracted to Tina and tries to start a relationship with her, despite her initial resistance, she becomes friends with most of the kids and takes strides to return to being "normal." But her situation and initial spite of Melissa who is also eying Nick cause a great deal of tension. After a particularly stressful session with Dr. Crews, Tina bursts out of the house and makes her way to the dock where her father died.
Believing she senses him, she uses her telekinetic powers in an attempt to resurrect him, only to inadvertently free Jason (Kane Hodder) from his imprisonment. She tells her mother and Dr. Crews, who believe she is being delusional and seeing things. However, Jason returns to his duties by dispatching Michael and his girlfriend Jane along with a nearby camping couple, Dan and Judy, who all happen to be in the area.
Tina panics when she sees a vision of Michael being killed and begins to doubt her own sanity, especially after direct evidence is apparently a delusion when she sends Dr. Crews to investigate. Dr. Crews discovers the bodies of Micheal and Jane and returns to the cabin not telling anyone what he saw. Amanda soon discovers Crews' true motives, however and overhearing the argument, Tina runs away, taking the car, which she crashes shortly afterward after having a vision of Jason killing her mother.
Jason enters the grounds and kills Russell with an axe to the face and drowns Sandra in the lake while she is swimming naked. Maddy, who is out to prove she can be attractive like Robin for David, goes looking for him and discovers Russell's body before being killed with a sickle when she hides from Jason. Ben and Kate make up from an argument just in time for Jason to crush his skull and shove a party horn into Kate's eye.
He kills David with a knife and moves upstairs to throw Robin out a window. Meanwhile, Tina and Nick reunite in the woods and discover Michael's body. During this time Jason makes his way downstairs to kill Eddie. Nick leaves Tina at the house to warn the other teens and soon discovers Eddie's body. He returns to find Tina gone and Melissa sneaking around the house.
He begs her to stay, which she agrees. Amanda and Dr. Crews discover Amanda's car, and during their investigation they discover Jason. After a short run, Dr. Crews holds Amanda as a human shield and she is killed by Jason who stabs her in the back with a scythe. Crews tries to escape, but he is killed by Jason who uses a tree saw. Tina finds her mother's body, then follows Jason back to the camp, discovering bodies along the way before confronting him.
Distraught and enraged over her mother's death, Tina finally begins using her telekinetic powers to keep Jason outside of arm's reach. She finally seems to kill him by dropping the roof of one of the house porches on him, but it only slows him down. Tina meets with Nick in which they return to her house and they run into Melissa where they tell her what is going on.
Melissa thinks that its all a sick joke, but when she opens the front door to leave Jason appears and axes her in the head, throwing her over a TV set. Tina continues to use her powers to keep Nick from being killed, eventually throwing Jason into the house basement. She douses him with gasoline and uses the furnace's fire to ignite it. She and Nick make their way to the docks just as the house goes up in an enormous explosion.
Jason comes back and knocks Nick unconscious and incapacitates Tina. Using her powers, she finally resurrects her father who wraps Jason's chains around him and pulls the killer back into the lake before Tina passes out. The following morning, Nick and Tina are placed into an ambulance where she tells him that "they" took care of Jason, meaning her and her father. Someone discovers Jason's mask, torn in two as the ambulance pulls off into the morning light.