At the movie theatre, a group of Derry residents are enjoying a screening of the 1962 musical The Music Man. A young boy, Matty, noisily sucks on a dummy in the audience. When confronted by an usher, he makes a run for it out of the auditorium.

Outside, the usher notes to a man called Hank it was Clements’ boy – and he’s been sneaking into the cinema all week. Hank urges him to be nice, considering what’s going on with the family and asks his daughter, Ronnie, if she saw him. She sends the usher in the opposite direction so he can get away, but he is spotted, and the usher threatens to call the police next time he sneaks in.

As the snow falls on the town, Matty hitchhikes along the road, with a couple pulling up in their car offering to help. With their own daughter and son in the backseat, the boy gets in and is offered a warm blanket. He tells them he just needs to go anywhere other than Derry. They tell him they’re heading to Portland, Oregon, so he’s come to the right place.

As a news report on the radio talks about nuclear tests and their potential impacts, including birth defects, the daughter, Arlene, tells her parents to turn it off, before picking up a box marked ‘liver’, dipping her fingers into the runny liquid inside and threatening to put it on the runaway’s face.

The mother, who is pregnant makes a joke about her daughter being a ‘harlot’ and everyone laughs hysterically – as Matty notices they’re re-entering Derry. He asks why they’re heading back there, asking them to pull over. They ignore him, instead instructing her son to spell strange words including ‘kidnapping’ and ‘necrosis’. He begins to pull on the door, but it’s locked. Frantic, he grabs at the wheel of the car, but the husband pushes him back, hitting the wife’s stomach on the way. Realising she’s about to give birth, the family start spelling out “O-U-T” over and over. The “baby” tears through the woman and drops to the floor of the car.

When she picks the baby up, it’s revealed to be a hideous winged creature resembling a two-headed baby, still attached to her by the umbilical cord. It starts tearing through the car. Terrified and with no way to escape, Matty goes back to sucking his dummy, puts his hands over his ears and closes his eyes. The whole family initially look on with some bemusement, before the newborn attacks, smashing a window. The dummy goes flying out of the car and into the river, where it washes into the sewer.

A young plane spotter, Phil, notices a C-130 jet flying overhead before running off to school. At the airbase, two pilots for the US Army – Major Leroy Hanlon and Captain Pauly Russo – arrive. They’re met on the ground by Colonel Fuller, who welcomes Hanlon and Russo to Derry and remarks their “expertise will be put to good use here”. It’s noted before their arrival, the pair served in Korea. The army is preparing for potential nuclear war against Russia.

As they drive through the base, Russo notices a bunker that’s been classified as “Special Projects”. Hanlon mentions he will not be staying on the base long, instead moving into the town with his family once they arrive. Colonel Fuller comments that, if they’re looking for normal, they’ll love Derry.

Meanwhile, over at the high school, a young girl, Lilly, arrives at her school locker to find it rigged and filled with pickles. Her friend Marge comes to join her and walks with her to class. At the same time, Teddy and his best friend Phil talk about the threat of nuclear war and what could happen, especially with the arrival of so many planes over the last few days.

As Hanlon and Russo get to work, they’re introduced to the team, who line up and salute them, with the exception of one, Airman Masters, who is noticeably hostile. Hanlon calls Masters out on not showing respect to a senior officer, but he says he’ll “get him next time, brother”, implying he has an issue with being bossed around by a Black superior. The comment is noticed by General Shaw on his arrival, who forces him to salute Hanlon. Shaw apologises on the squadron’s behalf and arranges to meet with Hanlon the next day.

That evening, Teddy and Phil are doing their homework at Teddy’s house, with Phil peeping on the woman next door as she gets undressed. Teddy is distracted and later notes it’s been four months since Matty disappeared. Phil comments that it’s messed up, but wants to ignore the issue, refusing to talk about it despite Teddy’s pleas. Teddy notes that they never even found a body, so he could have just run away. Matty had no friends, with kids having to be bribed with candy to even attend his birthday – which both Teddy and Phil forgot about - and now Teddy feels guilty, thinking that if he had friends he maybe wouldn’t have disappeared. Phil insists it’s not their fault, and they get in a fight.

Lilly preens herself in the mirror and runs a bath, before looking at a bracelet made up from Cracker Jack prizes on her wrist. She remembers going to a lookout point in an abandoned building with Matty, who tells him it was his secret hangout with Phil and Teddy. Over Cracker Jacks, they exchange the prizes they find in the packets, with Matty giving her a plastic turtle that she would later attach to her bracelet. He asks her not to tell them that he brought her there, and she asks if it’s because she’s “Loony Lilly Bainbridge”. He tells her she’s not but asks “what happened that day with her dad”.

She shares a story about a day she went to pick up her dad from work at the jarring plant one day. When they were leaving, she had realised she’d left a mood ring she’d bought in the building, and her dad went back to get it. However, there was a problem with one of the machines, and as he retrieved it the ring, he climbed into the gears and had got crushed as a result. He tells her that it wasn’t her fault, and it was just an accident, but she blames herself for him being there.

As fireworks go off, they overlook the town as he tells her Happy New Year and says that she’s not like other girls. He tries to kiss her but in her shock, she pulls away. Embarrassed, he leaves, saying he’ll get in trouble with his parents. She tries to stop him, but he dashes out of sight.

Back at home in present day, Lilly’s mother comes to see her, asking her to join her in a visit to her dad’s grave. Lilly tries to get out of it, but her mom insists it’s been a year, and having not even been there once, she should go. She admits she’s not ready, which annoys her mother, who tells her to take her medication before leaving her alone.

At that point, she notices a voice coming from down the drain – singing ‘Ya Got Trouble’ from The Music Man – and recognises it as Matty. She tells him to come home, but he says “he won’t let me”, and bloodied fingers appear from the drain, causing her to scream.

The next day, Lilly tells Marge what she heard, but she dismisses her, asking why Matty would come to her from beyond the grave when she barely spoke to him when he was alive. The girls then run into a group of popular girls, led by Patty. Marge rushes Lilly into a bathroom, telling her to cut out her bizarre stories. With only two more months until summer, Marge suggests she keep a low profile and not give anyone anymore gossip to talk about her. Lilly scolds her, saying she’s only worried about her own reputation and what Patty thinks of her. Marge storms off, saying she “makes it really hard to be her friend”.

After school, Teddy and Phil head to the lookout point and find Lilly waiting for them. They’re mad at Matty for spilling about their secret spot, which confuses Lilly who thought they were friends. She tells them about what she heard, but Phil doesn’t believe her. Teddy, however, is open to believing it, telling Phil if he believes in aliens, why couldn’t he believe that? Lilly is relieved he believes her, but he tells her he is just open to it, because it is improbable.

At the air base, General Shaw apologises again for Masters’ behaviour, saying he won’t let that kind of insubordination fly in his team. They discuss an injury Hanlon got while in Korea, and their plan for him to helm a new B-52. Sharing memories about their fathers, and how their influence led them to serving in the army.

That evening, Teddy and his family sit down for a Shabbat dinner, with his father commenting about his upcoming Bar Mitzvah, and how his practice is going, but Teddy is still preoccupied by thoughts of Matty and what Lilly told him. He asks his father if he’s heard of children being kidnapped and kept underground. The topic angers his family, but his father shares some of the horrors his family endured during The Holocaust – including how Nazis would use the skin of dead concentration camp prisoners to make lampshades. He angrily tells Teddy to cut it out with fantasy - as Jews they are more than aware of the real horrors of the world.

That night in bed, Teddy is reading a comic book, when his lamp keeps going out. When he switches it back on, the lampshade is made of human skin and still-moaning faces. Terrified, he falls out of bed and scurries under his desk, with the lamp coming after him before disappearing.

Teddy shares what he saw with Lilly and Paul the next day. It’s enough to get Paul on side, saying as someone who’s known Teddy forever, he knows when he’s lying. Teddy is still sick from seeing it, and wants to tell the adults, but Lilly warns him that if he’s not careful, they’ll all end up in Juniper Hill psychiatric hospital like she did. They promise to figure it out together and only share it with other people once they have evidence.

At the library, the trio start looking through newspapers on microfilm to find an article on Matty’s disappearance. Paul’s talkative younger sister Susie is forced to join them in lieu of a babysitter. As he sends her off on a mission to find a book that doesn’t exist so they can have some peace, they find an article noting that Matty was last seen by the daughter of a theatre employee – a 12-year-old girl named Ronnie.

Knowing who she is, they head to her house, but she yells at them to go away, saying police at one point had attempted to pin Matty’s presumed murder on her dad. As they leave, Paul comments that it’s a waste of time chasing a song they heard in the sewers, but it alerts Ronnie, scaring her because she’s heard voices too in the basement of the Capitol calling her name. She asks what song the voices were singing.

That night, Major Hanlon is in bed in the base when he is attacked by three masked men. They demand the specs for the B-52s from him, beating him and holding him at gunpoint. Hanlon refuses to disclose anything and tells the attackers they’ll have to pull the trigger. Before they can do that, Russo breaks down the door and between them they force the men to retreat – although Russo picks up a broken nose for his trouble.

The kids break into the movie theatre and Ronnie heads to the projection booth to fire up The Music Man. While they wait for the movie to be loaded, the group reflects on the ways they let Matty down, and how they want to make sure it doesn’t happen again. They all silently cry before the movie starts.

As the song Ya Got Trouble starts, the group are all shocked to see Matty in the crowd of the movie, holding a bundle in his arms. They call out to him and he reacts. As he walks closer and closer to the screen, he tells them that they’re the reason he’s in there – because they lied to him. His face then distorts into a terrifying grin, before the winged monstrosity from the car emerges from the bundle in his arms and bursts through the screen and into the theatre.

As the creature comes after them, most try to run, but Lilly is frozen in place. One by one they are brutally murdered – starting with Paul, then Teddy, and little Suzie. Ronnie is trapped in the projection booth, but manages to get free, saving Lilly in the process. As Ronnie asks about what happened to the others, Lilly realises she is still holding Suzie’s severed hand