The film opens with a scene from the end of Paranormal Activity 3, set in 1988, where Katie and Kristi watch as Dennis' spine is crushed by a mysterious force. Grandma Lois takes the girls upstairs while the entity takes the camera with them. A man speaks to the girls about "Toby" and how they are important to his plan. Twenty-five years later in 2013, Ryan Fleege, his wife Emily, and their six-year-old daughter Leila are about to celebrate Christmas, when Ryan's brother Mike moves in after breaking up with his girlfriend. Along with them is Skylar, who notices that Leila is talking to an imaginary friend named Toby. Mike finds a box of old video tapes, dating from 1988 to 1992. The tapes show a young Kristi and Katie with their mother and her boyfriend Dennis in 1988, while others from 1992 are in Lois's house where the two are practicing supernatural abilities with the mysterious man. Ryan and Mike notice that the girls are seemingly aware of the two's presence: they are able to foresee Ryan and Mike's every action as the pair simultaneously watch the video..