In rural Texas, go-go dancer Cherry Darling, resigning from her low-paying job, runs into her mysterious ex-boyfriend El Wray at the Bone Shack, a restaurant owned by brothers J.T. and Sheriff Hague. Meanwhile, the demented Lt. Muldoon and his men are making a transaction with chemical engineer Abby for mass quantities of DC2 (codename "Project Terror"), a deadly biochemical agent. When Muldoon learns that Abby has an extra supply, he attempts to take Abby hostage. The latter intentionally releases the gas into the air, mutating most of the town's residents into deformed zombies. The infected townspeople are treated by the sinister Dr. William Block and his unhappy, unfaithful wife, Dakota, at a local hospital.