Plot
Film student Alex Wright and his friends Jennifer Parker, Trevor Thompson, Tessa Hamill, and Jared Lee decide to produce a documentary about the original Grave Encounters film, which the entire public aside from Alex believes to be fictional. Alex posts an online plea for any information about the film and receives a message from someone named "DeathAwaits6". The message leads him to the mother of Sean Rogerson, the actor who played Lance in Grave Encounters. She believes that Sean is still alive but they discover that she has dementia and does not realize that her son is dead.
Alex realizes the cast and crew from the first film are all missing or have died (except for the directors, The Vicious Brothers, who are actually interns of the first film's producer, Jerry, and were not directly involved, thus sparing their lives). Alex meets Hartfield, who confesses that the film was actual found footage. Discovering that the Collingwood Mental Hospital from the film is actually an abandoned asylum in British Columbia, Canada, Alex and his friends travel there to meet DeathAwaits6, where they discover a Ouija board. Using it to communicate with spirits, they realize that their online contact is not a person, but a paranormal entity, which turns violent.
The group make their way out before being stopped by the security guard. As the group and the security guard argue, they hear a noise. The security guard tells them to stay put. As the security guard goes to check out the noise, the group hears gun shots. They go to check what has happened and find that the security guard has disappeared.
The group tries to escape, resulting in the deaths of Jared (who is violently hurled out of the window) and Tessa (her head crushed by an invisible force). Along the way, the survivors also witness the death of the asylum's security guard by electrocution.
The survivors manage to escape the hospital and return to the hotel. To their dismay, the hotel's elevator leads them right back to the tunnels beneath the hospital. There, they meet Rogerson and discover that he has been trapped inside surviving off toilet water and rats in the darkness for over nine years, lobotomized and driven insane. Rogerson explains that the reason the hospital is like this is due to Dr. Arthur Friedkin's satanic experiments and rituals which merged the spirit world and the physical world. He shows them a red door and says it is the only way out, but it is wrapped in chains. Sean provides a map he created of the dimension explaining how it is bigger than a city, and explains the “building” constantly shifts and changes. The surviving members retrieve a chain cutter left in Trevor's tool bag with Seans aid.
While the group sleeps for the night, Rogerson, compelled by Dr. Friedkin, strangles Trevor to death, then steals the team's equipment to cut the chains on the door. He goes through it, only to realize that the door leads nowhere. The entities instruct a deranged Rogerson to continue killing. Alex and Jennifer wake up and stumble upon Friedkin's satanic altar as he performs a lobotomy, then sacrifices an infant. The couple flees and encounters Rogerson, who demands them to hand over their tapes in order to "finish" the film, which is the only way to escape the hospital. During the struggle, a void opens up on the wall and sucks Rogerson in pulling him towards an unknown fate.
Realizing that Rogerson was being honest in how to escape, Alex kills Jennifer by smashing her face with a camera, thus completing the film. He then exits the hospital through the red door, which leads him to the outskirts of Los Angeles. He is arrested while walking down the street at night. The last scene shows that the footage has been made into a film, with Alex and producer Jerry claiming that everything the public sees has been staged and it is "just a movie". However, Alex tells the interviewers not to go anywhere near the hospital as it's not worth it.
The film ends, cutting to a black screen with the numbers "49, 14, 122, 48" appearing on screen, which, if searched on a service such as Google Maps, comes up as the approximate latitude and longitude coordinates of Riverview Hospital, near Vancouver, BC, Canada (actually at 49.25,-122.81) where most of the film's story takes place.
