Max, Zack, Sammy and Deputy Karl manage to seemingly kill the witch and escape the house after Julie rescued Amanda earlier in the film. The last scene shows, however, that the witch is actually alive and well, with the incident having increased her notoriety.
The film begins with a young girl named Amanda Drake crying in bed. Amanda tells her mom that she went up to a cabin in the woods that local legend says is home to an immortal witch called (wait for it).... "The Wicked" (Cassie Keller). She broke a window there and now says The Wicked is after her. The mom incorrectly assures Amanda there is no such thing as The Wicked moments before the witch magically sucks the girl out of her window and into the night.
We cut to the funeral of a beloved town magician. The magician's grandsons Zach (Justin Deeley) and Max Reese (Devon Werkheiser) both mourn in separate ways. Zach, the older brother, is a popular kid. He wonders off to smoke with his friends Carter and Traci, who convince him to go camping near the witch's cabin by offering him a chance to hang out with new girl Julie Adams (Jess Adams). The group is overheard by Max's friend Sammy (Diana Hopper). She convinces Max to sneak to the campsite with her so they can get a picture of Zach there and use it to blackmail him (Zach is grounded by his dad). Max also inherited a couple of things from his grandfather that will become plot relevant - a "witch bottle" that repels witches (which Sammy promptly breaks) and a juiced-up lighter.
The next day, Zach, Carter and Traci pick up Julie and explain the local legend. A coven of witches lived in the woods and were burned at the stake. The witches used all their power to protect one of their members (now called... THE WICKED), who now eats kids to stay young. It is a local tradition to go to the house in the woods and throw a rock at the side of it. If you break a window of the house, the Wicked will come after you, but if you miss the window, you are safe (thus creating one last torment for kids who are bad at sports). Max and Sammy are on the way to the site as well, although they are briefly detained by police officers Karl (Jamie Kaler... sporting a wicked mustache) and Mahoney. The officers hate Sammy because she used to prank call them and also, because her mom is an alcoholic (I'm not making this up). Meanwhile, for no reason, the Wicked kills a park ranger.
Zach's group (who drive a car) get there first and throw rocks at the house all at the same time, with one of them (never shown who) breaking a window. They then go off to have sex with their respective partners, ignoring ghostly whispers as "the wind" and obvious movement in the woods as "shadows." Max and Sammy get there next (slower because they ride bikes and also, they stopped to make out with each other for the first time) and also throw rocks. Max breaks the window and unlike her slow stalking of the other group, the Wicked (who has teleportation powers) teleports out of her house and immediately abducts Max.
Later that night, Julie hears a noise and goes out to investigate. She finds Amanda's teddy bear and insists that they go investigate despite the other teens wanting nothing to do with it (yes, the others would rather leave a young girl to die). Eventually, they hear crying from the Wicked's house, but only Julie and Zach are brave enough to enter. They find Amanda (but oddly, not Max) wrapped up in a spider web (she has web abilities) and free her. They flee to the campsite, only to discover that the Wicked has... stolen their car. Zach soon finds Sammy hiding in a tree and he tells Sammy, Carter, Traci and Julie to get Amanda to safety while he returns to free Max, having gone from zero-to-hero in a few scenes. Sammy goes to the ranger station to call the police while the others run blindly through the woods (have they never seen a horror film?). Eventually, the Wicked catches Zach, Carter and Traci (Julie and Amanda escape her clutches by hiding behind... a bush).
The teens manage to escape several times, but are always recaptured (and ALWAYS keep throwing away their weapons). During this time, Carter and Traci are put through a giant meat grinder and eaten - restoring The Wicked's youthful appearance. Sammy eventually gets Officers Karl and Mahoney to come up to the house and investigate. The Wicked's power somehow prevents the police from seeing the trapped kids or meat grinder, but the illusion is ruined when the Wicked randomly kills Mahoney. Sammy runs into the house and frees Max and Zach while Karl and the Wicked wound each other. For some reason, the Wicked has those witch bottles throughout her house and Max, recognizing them, uses it to repel her.
Suddenly, the Wicked decides witch bottles have no effect on her (maybe she likes to perversely provide false hope to her victims?) and begins poisoning the teens with spectral mist. Just as they are about to pass out, Sammy remembers witches can burn. Max pulls out his giant lighter and Sammy amazingly finds an aerosol spray can on a shelf (witches like to keep their torture dungeons smelling fresh?) and they create a makeshift blowtorch to incinerate the witch. It turns out Officer Karl survived his wounds and police backup (an entire SWAT team!) arrives. Julie reunites with Zach and Sammy embraces Max. Amanda has been returned to her mother after receiving medical treatment (apparently, doesn't need therapy, just morphine). The police search the house, but can't find the body of the Wicked anywhere.
The film ends with a news report saying that the recent fiasco will only increase the legend of the Wicked. We then cut to a playground, where The Wicked (who seems unharmed - so witches CAN'T burn), caressing the face of a young girl until the girl's mom takes her away without saying anything to the literally cloaked stranger that was touching her daughter in front of her (I am not making this up).