In the small town of Darkness Falls, the legend of the Tooth Fairy is taken very seriously. Unlike the benign figure of childhood tales, this Tooth Fairy—Matilda Dixon—was a kind-hearted woman who gave children coins in exchange for lost teeth, until a tragic misunderstanding led to her being condemned by the townsfolk. Horribly disfigured in a fire and subsequently executed for a crime she didn't commit, Matilda cursed the town and vowed vengeance. Now, her spirit is said to haunt the darkness, mercilessly killing anyone who lays eyes on her if they venture into the dark unprotected. Kyle Walsh, the protagonist, experienced this terror firsthand as a child, surviving an encounter with the entity but losing his mother in the process, an ordeal that leaves him deeply traumatized and disbelieved by all except his childhood friend, Caitlin, and her younger brother, Michael.

Years later, Kyle, now an adult, is forced to confront his past when Caitlin reaches out for help. Michael is experiencing unexplained fears of the dark, similar to what Kyle went through. Reluctantly, Kyle returns to Darkness Falls to face his childhood nightmare and protect Michael. Despite his deep-seated fears and skepticism from the townspeople, Kyle's return sets off a chain of events that makes it clear the Tooth Fairy's wrath is as potent as ever. As night falls, Kyle must navigate a town cloaked in darkness, facing a vengeful spirit that is all too real, while trying to save himself and those he cares about from a relentless, unseen evil lurking in the shadows.