We cut to the house of Joe Lamb (Joel Courtney). It was his mother that was killed at the factory. The mother of his friend Charles remarks on how crushed Joe seems to be with the death of his mother. She speaks her concerns on his father Jackson (Kyle Chandler); saying he never had to be a father till now. Joe sits outside on a swing set when he sees a man drive up in a yellow and black muscle car. The man, Louis Dainard (Ron Eldard) takes a swig of liquor and goes inside. Joe can hear a commotion and then his father comes out with the man in cuffs. Joe looks over in shock. His father sees this and tells him he will be back later. He puts Louis in the squad car and drives off.
4 MONTHS LATER
School is out in Summer 1979. Joe walks with his best pals Charles, Cary, Preston and Martin. Charles is making a zombie flick to enter into the local film festival and has called upon his buddies to help him make it. Charles reveals he got Alice Dainard (Elle Fanning) to be the female lead, since they needed more thematic elements for their zombie film. They are going to sneak out at midnight and Alice will steal her father's car for the night.
Joe goes home and finds his father crying in the bathroom. Jackson plays it off and says he will be out in a second. They go to a diner where Jackson tells him of his plan to send Joe to a baseball camp for six weeks. Jackson says they both need time to heal. Joe counters, saying he thought he was going to have the summer to himself and that he has to help Charles finish his movie.
Joe sneaks out and waits with his friends for Alice. When she gets to them, she freaks that Joe is there, since his dad is a deputy and almost bails. Joe promises not to say anything and she relents.
They drive out to a train station to shoot their scene. Martin is the detective character and Alice is his wife. Joe does some makeup for Alice and they seem to have a moment. With Charles directing it all, they practice the scene, where Alice does an actually good performance, which stuns the friends. As they begin to shoot for real, Charles notices a train coming by, and realizes they can use it as free ambiance for the scene. As they are filming as the speeding train passes, Joe looks behind them to see a truck jump onto the tracks and head straight for the train. The group realizes this just as the two collide.
The explosion causes the entire train to derail, causing massive damage. The kids go in separate directions, almost getting hit several times. They all live despite the odds.
Joe notices in the wreckage a crate of small white cubes and pockets one.
The gang goes to the wreckage of the truck and realize the driver is Mr. Woodward, their 4th grade science teacher. In his hand is a map of the trains route. Woodward snatches it back still alive. He tells the group to stay quiet, "or they'll kill you and your family." Woodward sees the military and points a gun at the group to scare them off. They race back to the car, grabbing their camera equipment in the process. They get away but not before the Air Force soldiers, lead by Nelec (Noah Emmerich) notice the car.
The group freaks out by what they saw and Alice is clear they cannot talk about it. Joe tells her they won't say the word. Joe goes home and while taking a bath studies the cube.
The next day, Charles and Joe go to the film store to get the film developed and see about getting the camera fixed as it was damaged in the fracas. After learning it would be more cost effective to buy a new camera, Joe offers to let Charles borrow his dad's. Joe calls Alice about doing some new scenes, but Alice wants no part in any more film making. Joe says he is coming over.
Joe goes over to Alice's house to convince her but she will not budge. Her father, Louis comes up and Joe lies about inviting Alice to a party. Louis says no and goes inside, only to come out again and tells Joe he is not welcome at his house or around his daughter. Her father's cold reaction make Alice change her mind. She is back in.
The group work at Charles house. Alice is in zombie makeup and asks for pointers on how to act by Joe. Once again she acts convincingly, and moves closer to Joe. Joe gets nervous thinking she is about to kiss him, but she just pretends to gnaw on his neck.
Jackson goes down to the train wreckage and talks with Nelec, who gives little information about the cargo or why the wreck happened. Nelec assures Jackson that there was no dangerous cargo on the train.
Meanwhile, the group films on a hill near the wreckage, with Cary as a zombie and Martin shooting him with a prop gun. They watch as the military scatters around and they wonder what could be so important.
Jackson talks to the sheriff and tells him his suspicions. The Sheriff dismisses them, telling Jackson he needs to take some time off due to his wife's death.
Later that night, the sheriff stops by the local gas station and chides the attendant for wearing a Walkman. The Sheriff goes out to pump gas and several strange things happen. Many dogs run off into the night. His sirens turn on without warning. Then most disturbingly, a trash container is rocketed from the alleyway right past him. The Sheriff looks around and sees something. He screams.
The attendant, listening to his music, doesn't see or hear the Sheriff's car being destroyed. Taking off his headphones, he looks out and sees the wreckage. He goes outside but doesn't find the Sheriff. He turns around and sees something too, screaming. He tries to run back into the store, but the monster grabs him, the monster obscured by the gas station's sign.
The next morning, Jackson is called to the gas station. He realizes that the Sheriff is missing. He gets called into town and founds various incidents of missing dogs and electronic sabotage. Jackson sees the military rolling in, ready to take control of the town.
Lights start flickering in and out around town. Electricians are called over town and discover that cables are outright missing from the poles. One such electrician is in a cherry picker rig when he sees and hears some strange noises up in the trees. The power to his rig shorts out just as he sees something. He screams and he is grabbed as something destroys his truck.
The following morning, Joe and his friends decide to do some more shooting for the movie.
Jackson holds a town meeting, where angry residents believe the Russians are behind everything (being in the middle of the Cold War and all). One resident however, noticed that he hears military chatter on his ham radio. Jackson questions him on the frequencies he hears them on. Jackson goes back to the station and tells the other deputies to get the radios so they can find out what the Air Force is saying. Louis is in the police station and tells Jackson to keep Joe away from his daughter. Jackson, not knowing about them being around each other is seething. He has little time to think of that though, as one of the deputies found the right station, which the military is using. They hear a code phrase "Walking Distance." Jackson listens intrigued.
Joe and the group are shooting in front of Woodward's house for the extra background of the military convoy around them searching the place. Charles sees Jackson arriving and tries to warn Joe. Jackson tells Joe to wait in the car. Jackson goes up to Nelec demanding answers. Nelec will not give any. Jackson then says he will call DC and ask about "Walking Distance." Nelec calls out to Jackson saying he will give him answers, but not here, and not now.
Jackson takes Joe home saying he is no longer allowed to be around Alice. Her father is a no good drunk. Joe pleads with his father saying Alice is a good person, but Jackson says he has a whole town to take care of. Sad, Joe runs out into the night and heads to the cemetery to sit at his mother's grave. He looks into the distance to a nearby garage and sees and hears a loud commotion.
At a military hospital, Nelec talks to a still alive Woodward about the "cargo." Nelec says they used to disagree in the lab but that no longer matters; the creature is Nelec's and he will trap and capture it again. Woodward, probably realizing what is coming next, tells Nelec that he connected with the creature and part of him is now in it. "When it comes for you, know that I will be there watching." Woodward says. Nelec has one of his men, Overmyer, inject Woodward with a lethal substance, killing him.
The next day, Charles requests that Joe gives him a model train to be blown up via Cary's fireworks for the movie. Joe says sure. Alice comes by later and Joe shows her the train. Alice is impressed by his knowledge of models.
That night, Jackson goes to the meeting point Nelec requested. He is surrounded by soldiers and put under arrest. It was a trap by Nelec who never planned on telling him anything.
Later, Joe not realizing what happened to his father, is visited by Alice in the late night. She tells Joe that he shouldn't allow Charles to blow up his train as he shouldn't get everything he wants. Though the power is still out, Joe's camera turns on, with a 8mm film of his mother when he was a baby. Alice asks to watch it and cries. She tells Joe her father got drunk that day so that's why his mother got into her accident and died. Alice says her dad wishes it was him and sometimes she thinks the same (because he became a pitiful drunk in the process). Joe tells her not to say that. They see the cube Joe had start to move. It then rockets out of the room, making a hole in the wall, with the apparent destination being the local water tower.
Alice goes home and her father, and Louis asks where she was. Alice tries to play it off, saying she should go to bed. Louis says she can go "like her mother." Angry, Alice runs off on her bike. Her father, drunk, chases her in his car. She doubles back just as he gets into an accident. As Louis comes to, he can see his daughter grabbed by something. By the time he gets out of the car, she is gone.
Nelec begins "Walking Distance." It's a ploy to start a large fire to get the town evacuated so he can fight and capture the creature uninhibited. The townspeople buy it and start to leave.
Charles and Joe get back the film from the fateful night and go to Charles' house. Charles is mad at Joe and he finds out why. Charles had a crush on Alice and that is why he asked her to help them. But Alice likes Joe, and what is worse is Joe likes her back. Despite this, Charles lets it go. They watch the movie and though Charles complains that most of the train footage is useless to him, they notice the creature exiting the train car. They are shocked. They hear the emergency sirens. They have to leave and are herded into a bus to the evacuation center.
At the camp, Joe finds Louis who tells him the creature took Alice and no one will believe him; they just keep medicating him to shut him up. "I'll believe you." Joe says, seeing it first hand.
Joe talks to Charles, Cary, Martin, and Preston, saying he is going back into town to find Woodward's research and save Alice. Preston elects to stay behind. Charles talks to his older sister, saying he will babysit their siblings so she can go to the party her parents won't allow her to. But she will have to flirt with the camera store guy, Donny, since he has a thing for her. She is successful and Donny drives the group into town.
Jackson meanwhile, is stuck in a detention room. Pretending to need to go to the bathroom, he knocks out a guard and steals his uniform. He sees guards near a fuel truck and shoots it to make it explode. With that diversion, he steals a truck, heading back into town.
Joe with the group tells Donny to go to the school, where he think Woodward hid his research. They find it and start to watch. They find out Woodward was in the Air Force over a decade ago as a scientist. His division found an alien who had crash landed on Earth. Woodward concluded that all it wanted was to go home, but Nelec and others kept in captivity and treated it inhumanely. The creature came to hate humans. However, it knew Woodward to be a genuine kind person as it grabbed him and made a physic connection. Woodward says via tape dictation that he will not stop trying to save the creature from captivity (that's why he derailed the train). Joe and his friends hear a noise. It is the Air Force troops with Nelec. They are put into a bus and driven back to camp. Donny sees this and is freaked out about losing a chance with Charles' sister.
On the bus, Cary thinks they will be killed for knowing too much. Charles says it isn't true, just as the bus is attacked by the creature. It topples the bus, and begins attacking the soldiers, killing Overmyer and several others. Unable to get out of their cell in the back of the bus, Joe sees a broken window and breaks the glass, helping his friends climb out. Nelec stays behind and shoots at the monster until his gun runs empty. He throws it down, faces his enemy, and is killed by the creature. The kids watch from a distance. Donny finds them and Joe tells him they need to go back into the town. He knows where to go.
They get back into town, where a stoned Donny waits in the car. They see the military are in full force in the town firing off their weapons. Problem is, they are all malfunctioning (like the power in town) and are instead destroying houses and themselves. Joe, Charles, Martin and Cary run through the destruction. They take refuge in a house only for it to be partially destroyed. Martin's leg gets broken and the group separates. Charles stays with Martin, and Joe and Cary head off.
Jackson goes back to the refuge camp and tells another deputy what is really going on. He talks to Preston who explains what is going on and shows him the 8mm of the train wreck. Jackson sees two soldiers about to take Louis and swoops in, saying he has orders to personally take the man to Nelec. Being in a higher ranking uniform (and them not knowing Nelec is dead), the two relent and give him Louis. Jackson takes him to the car saying "Let's get our kids." Driving to town, Louis tells Jackson he came into his house that day to say he was sorry, that he never intended for anyone to get hurt, especially his wife. Jackson tells him (as if to admit to himself as well) that it was an accident.
Joe and Cary go to the garage in the cemetery and break in, finding a large, cavernous hole. They rappel down using sparklers as flares. Walking a little they find the creature's command center, with all the stolen electronics and power cables. He is trying to rebuild his ship. Also, they see numerous people strung up including the Sheriff; the creature is using them for food. Joe tells Cary to make a distraction so he can grab Alice, who he sees. Cary lights the explosives just as the creature is about to take Alice. Joe slaps her awake, and they get up to see the Sheriff and another woman regain consciousness. They run out of the lair and find Cary. However, the monster grabs the woman and the Sheriff as Alice, Joe, and Cary run for their lives.
The creature catches them in a dead end part of the cavern. The group thinks they are doomed, but Joe faces the creature, telling it to go home. The creature grabs Joe to the horror of Alice. Afraid, but unwilling to back down, Joe tells the creature that bad things happen without notice but you can still go on. "You can still live." Joe tells it. The creature, sensing he is genuine and means no harm, lets him go. The three leave the cavern.
They get back into the center of town where suddenly, all metal and electronics are grabbed from where they stand. Cars, TVs, the guns of soldiers. All taken and slammed into the water tower along with the numerous white cubes. Joe realizes the creature is rebuilding his ship to leave.
Jackson and Louis return to town and find their kids. They tearfully embrace them.
Just as the ship is about to blast off, it looks for a few more pieces of metal. It finds Joe's locket (his mother's that he has carried around the whole movie) but he holds on to it. It contains a picture of him and his mother when he was a baby. He holds on for a moment then decides to let go (symbolizing his attempt to find peace after her death). The locket attaches to the ship, and the ship blasts off to space, leaving the soldiers, Joe, Cary, Alice, Louis, Jackson, Charles, and Martin stare in awe.
Joe and Alice clasp hands and smile at each other as they watch the creature's ship race off to return home.
NOTE: During the credits we see the zombie movie they were making throughout the film.
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