Immediately after his apparent demise at the end of Phantasm II, a new Tall Man emerges from the white room dimensional fork. During this time, the hearse driving Liz and Mike carries on and explodes. Reggie, who was attacked by the Alchemy/Tall Man creature, rushes over and finds Liz dead and a dwarf devouring her face. After killing a few dwarfs with his four-barrel shotgun, the Tall Man appears, apprehending Reggie and an unconscious Mike but leaves when Reggie threatens to detonate a grenade. Stating that he wants Mike in one piece, the Tall Man leaves with Liz's head in hand claiming to return for Mike when he's well again.After apparently spending two years comatose in a hospital, Mike has a near-death experience in which his brother Jody appears and tells him he's not ready to cross over into the light. Mike walks on but the Tall Man stands in his way, causing him to wake up. Just as Reggie arrives, Mike is attacked by a demon nurse but fights her off. A sphere emerges from her head and crashes out through the window. Back at home, Jody appears again to warn Mike but the Tall Man arrives via dimensional fork, fights off Reggie and Jody (now forcibly transformed into a charred flying sphere), and draws Mike through the gate with him.The next morning, Reggie (with the Jody-sphere) travels to the small town of Holtsville, which turns out to be deserted. Reggie is captured by three looters who lock him in his 'Cuda's trunk and drive on to another house. There they are attacked and killed by a little boy named Tim, who also releases Reggie.After they have buried three looters in the yard, Tim tells Reggie how the Tall Man took his parents and destroyed the town. In the morning, Reggie and Tim find the three graves empty and their pink hearse missing. Setting out to find the Tall Man, Reggie wants to leave Tim with a woman looking after orphans but the boy hides in the trunk and comes along.Reggie enters the Holtsville mausoleum and is confronted by a sphere. Before he can destroy it, he is assaulted and subdued by two young Black women, Tanesha and Rocky. Reg tries to warn them but the sphere kills Tanesha, as well as damaging Rocky's nunchaku. Tim appears and shoots it out of the air with his pistol. The three join forces and drive on, looking for a town called Boulton, which contains a large mortuary. On their way, they come across a convoy of hearses driven by gravers and follow them.As they camp outside, the Jody-sphere floats over to Reggie. In a dream, Jody appears and leads Reggie to the Tall Man's lair, where Mike is imprisoned in a small cell. The two free him but the Tall Man reappears and pursues the trio. Jody is transformed back into a sphere and Reggie awakes. Jody appears again, opens another gate, and Mike emerges. The Tall Man tries to emerge as well but Reggie manages to shut the gate just as he was about to reach through, cutting off the Tall Man's hands. They manage to fight off the small creatures that the hands morph into and also later the pink hearse containing the three comically-zombified looters.They reach Boulton mortuary, where they come across a cryonics facility which reminds Mike that the Tall Man dislikes cold. While Reggie, Rocky, and Tim are separately attacked by the looters, Mike consults with the Jody-sphere, who explains that the Tall Man is amassing an army to conquer dimensions. He also shows him in a dream what the Tall Man does with the dwarf creatures he has created from the dead: he removes the sapient part of the brain to create the spheres, turning the body into a drone and the mind into a killer. The Tall Man senses their presence before they can leave and paralyzes Mike. Surrounded by hundreds of spheres, the Tall Man reaches for Mike, who wakes up and finds himself strapped to the table. The Tall Man grabs and subdues the Jody-sphere and welcomes Mike. Soon after, two of the looters, Rufus and Henry, wheel in Tim. Mike tries to give a message to the boy, saying "There are thousands of them", but is paralyzed beyond speech by the Tall Man.Rocky meanwhile manages to shake off her attacker and goes on to fight off Reggie's. Cut free by the Jody-sphere, Tim runs into the remaining looters who are killed by the Jody-sphere and Reggie's four-barrel shotgun. The trio crash into the embalming room, where the Tall Man has begun operating on Mike. Rocky impales the Tall Man with a spear dipped in liquid nitrogen, causing his flesh to begin melting. Rocky and Reggie lock him in the refrigerator room. A golden sphere breaks out of his head, crashes outside, and chases through the corridors. Surprised by the golden sphere, Reggie catches it with a plunger and is almost overpowered by it. With help from Rocky and Tim, he submerges the sphere in the nitrogen tank, neutralizing it.In the meantime, Mike climbs from the table and sees yellow blood issuing from his wound. He looks into a mirror and sees a golden sphere in his own head, concealed by his torn skin. Just after the Tall Man's sphere has been dumped into the nitrogen, Mike appears, showing silver eyeballs, complaining of the cold and walking outside. Reggie chases after him but Mike warns him to stay away. Jody leaves as well, telling Reggie that they'll be in touch.Reggie suggests searching the mortuary but Rocky leaves, having had enough of dealing with the undead. Reggie and Tim go back inside and Tim reports that Mike said that "There are thousands of them." Unknown to them, dozens of spheres are hovering above them.In the next room, Tim finds the poles of the dimensional fork and the nitrogen tank overturned. He goes back to find Reggie pinned to the wall by the force of the spheres. Tim tries to get his gun but a new Tall Man reappears and watches as Tim is pulled through a window by a creature, followed by the sound of him getting torn apart and killed... continuing the films' trademark ending.