Jamie Ashen (Ryan Kwanten) and his wife, Lisa (Laura Regan), receive an anonymous ventriloquist doll called "Billy". While Lisa is playing with Billy, a figure approaches her, causing her to scream. Jamie finds her dead with her tongue cut out. After Jamie is released from custody by Detective Jim Lipton (Donnie Wahlberg) due to lack of evidence, he spots inside Billy's box a mysterious message about "Mary Shaw", a ventriloquist from his hometown, Raven's Fair.
At Raven's Fair, Jamie visits his estranged, wealthy and wheelchair-bound father, Edward (Bob Gunton), and his much-younger wife, Ella (Amber Valletta), for information regarding Mary Shaw. Dismissing them as superstitions, Jamie arranges for Lisa's funeral with the help of a local mortician, Henry Walker (Michael Fairman). Jamie meets Henry's senile wife, Marion, who tells him of the danger of Mary and her puppet, Billy. After burying Billy, Jamie is confronted by Detective Lipton, the latter still doubting Jamie, and forces him to dig up Billy.
Henry tells Jamie about Shaw: Shaw (Judith Roberts) was a famous ventriloquist who was publicly humiliated when a boy, Michael, pointed to her moving mouth. Michael disappeared the next day, and his family blamed it on Shaw, whose last wish was to have her body turned into a dummy and buried with her 101 dolls. Henry, then the young son (Keir Gilchrist) of the local mortician, saw Shaw, having been executed by Michael's family, rise up, but Henry was spared thanks to his having kept his mouth shut. This is because Shaw only takes her revenge by killing those who scream. Jamie finds out that Michael, the first victim, was his great uncle; the Ashen family were the ones who killed Shaw by cutting out her tongue, and she has been seeking revenge against their entire bloodline by killing them the same way.
Henry is killed by Shaw. Detective Lipton discovers that all of Shaw's dolls have been dug up. He informs Jamie, who receives a call from "Henry," asking him to go to Shaw's theatre. There, the duo discovers 100 of the dolls lined up with Michael's body, which has been turned into a marionette. Through a doll, Shaw reveals to Jamie that she killed his wife because she was pregnant with his son, thus killing any potential newborn of the Ashen family. Jamie and Lipton burn the theatre and all of Shaw's dolls, though, in the process, Shaw successfully makes Detective Lipton scream and kills him.
Back at his father's residence, Jamie is confronted by Mary Shaw but he repels her by throwing Billy, the 101st and last of the remaining dummies, into the fireplace. He is horrified to learn that his father had already died a long time ago; the current "Edward" is the corpse converted into a doll controlled by Ella, who is the "perfect doll" for Shaw, created just before her death. He screams as Ella, possessed by Mary Shaw, goes after him to take his tongue.
The film ends with Jamie reciting a nursery rhyme about Shaw and a photo album with human puppets is shown: Jamie's wife Lisa, Henry, Detective Lipton, his father Edward, Ella, and Jamie himself.
Who is Jamie's wife?
Lisa