Jacob Rathbone is a 12-year-old boy with a fear of the dark who lives with his stepfather, Davis and his mother, Isabel, who is frustrated with her son's frequent night terrors. After being discovered dancing while dressed in his late grandmother's dress and being suspended from his school (after being bullied for his obsession with his late grandmother), Jacob is sent away to a boarding school in the wilderness governed by the eccentric couple, Dr. and Mrs. Sherman. He meets his classmates: twins Lenny and Calvin, and social outcasts like disfigured burn survivor Phil, Tourette's sufferer Frederic, autistic Elwood Ramsay, and manipulative Christine Holcomb, the daughter of Davis' boss, Mr. Holcomb (whom Jacob met on one evening when he and his parents had dinner with her family). Their classes are administered under Dr. Sherman's strict regime that consists of a Bible Studies curriculum and corporal punishments.Not long after, Frederic is discovered dead half-naked in the bathroom in apparent suicide by hanging. Christine uses this opportunity to flee the school with Jacob, only to be caught and brought back. Dr. Sherman reveals that Christine was sent there as a result of having murdered her older brother, Timothy, and driving her mother to commit suicide over the tragedy. Christine lures Jacob to her room, where she confesses to talking Frederic into trying out auto-erotic asphyxiation and pushing him to death to divert everybody's attention so she could escape. She blackmails Jacob into dancing with her, during which she attempts to stab him with a pair of scissors but is overpowered by him. In a display of her masochistic tendencies, she professes her love for him and claims she wanted to provoke Jacob into beating her up.Jacob later finds Elwood dead in bed. An argument between Dr. and Mrs. Sherman - whose real identity is Lynn Adams - reveals that it was she who had murdered Elwood, and that the children will all die that night. He finds the bodies of the real Dr. and Mrs. Sherman and Frederic stashed in the freezer in the basement. A conversation between Mrs. Ramsay and Dr. Sherman suggests a prior arrangement where, being unable to cope with Elwood's condition, Mrs. Ramsay had sent him there to be killed off seemingly in an accident - a fate that awaits all the other children. Ms. Adams stabs Mrs. Ramsay to death; Dr. Sherman slits Ms. Adams' throat and kills the groundskeeper.Dr. Sherman reveals to Jacob that he has been contract killing since he was around Jacob's age, and his plan is to have everyone in the house killed in a fire. Jacob also finds out that it was his stepfather, Davis, who had him sent there to rid himself and Isabel of him. Jacob manages to bludgeon Dr. Sherman to death and set him on fire.He evacuates everyone from the house except Christine, whom he leaves for dead as a way of avenging Frederic's death. Having declared his love for Christine, Jacob peels off his dress, showing his true, naked self to his friends for the first time. Now rescued, the children reunite with their parents, as Jacob whispers to Phil's father that he knows of his intention, and promises to make him regret it if anything happens to Phil.Throughout the film, the audience is shown flashbacks where, being forced into hiding during World War II, Jacob's grandmother Feiga, a recluse, sharpened her teeth with a nail file, while her compatriot, Tsipi was frequently raped and tortured by a Nazi soldier in exchange for her life. Back at home, having finally overcome his fear of the dark, Jacob waits as Isabel's terrified screams are heard from the dinner table. Davis dies from ingesting poisoned wine (tainted by the same poison Dr. Sherman used to attempt to kill Mrs. Ramsay). Jacob taints his lips red with blood, mirroring Feiga ripping out the Nazi's throat with her fangs; suggesting that just like Feiga, hardships have made him a fighter.