The Wraith is Jake in disguise, and Jake is actually Jamie in a new form. He gets his revenge on Packard and his gang for murdering him, killing all of them except for Rughead, who is spared because he played no part in the murder. Afterwards, he reveals his true identity to Keri, saying that this form was the closest he could come to who he once was, and he says that they were meant to be together. He leaves her for a bit to give his Turbo Interceptor to his younger brother Billy (who realizes soon after that Jake is his deceased brother), and then he returns to pick her up, and they leave town for parts unknown.
After Oggie (Griffin O’Neal) and Minty (Chris Nash) get killed by the Turbo Interceptor and its driver in street races, Sheriff Loomis (Randy Quaid) warns Packard (Nick Cassavetes), Gutterboy (Jamie Bozian), Skank (David Sherrill), and Rughead (Clint Howard) that if they try to kill whoever is wiping out their gang, then they will be on the fast track to the gas chamber. Back at their warehouse later on, Packard leaves the other three to “take care of some business”, and Rughead then declares that he is leaving town, afraid for his life and convinced that the driver of the Turbo Interceptor is a real-life wraith out to get them.
As Rughead is leaving the property, the Turbo Interceptor suddenly appears and drives past him full speed into the warehouse, blowing it up and killing both Gutterboy and Skank. However, it then leaves without doing a thing to Rughead. When Loomis shows up soon after with his men, Rughead confesses to him that Packard and the others had killed Jamie (Christopher Bradley), but he found out afterwards because he was absent when the crime was committed, and he is sure that Jamie is the driver of the Turbo Interceptor. Loomis visits Jamie’s brother Billy (Matthew Barry) at the diner where he and Keri (Sherilyn Fenn) work and learns of how Keri had told him that she was present the night Jamie was killed, but she was knocked out in the midst of the murder and didn’t know who did it. Meanwhile, Jake (Charlie Sheen) drops off Keri at the diner, but before he goes, he tells her that she must stand up to Packard soon, and he drops hints that he is in fact Jamie in a new form, and tells her that he has come a long way for her and that his time here is just about over.
Having watched their conversation from afar, Packard comes up to Keri and forces her into his car, and he beats up Billy when he tries to interfere. As they drive off, Packard tells her that they are running away to California (undoubtedly to escape the Wraith), and Keri finally stands up to him by getting him to admit that he and his gang did kill Jamie, and then telling him that he can kill her, too, but he could never make her love him. Packard stops the car and has them both get out, but as he looks to threaten Keri with his knife, the Turbo Interceptor shows up. Packard wastes no time in challenging the driver to a race, and he meets his end when the Turbo Interceptor blows up his car in a head-on collision. Walking back to town alone, Keri hears the explosion, but she just keeps on walking. Upon seeing the aftermath of the crash, Loomis decides to stop pursuing the Wraith, not only because he understands that it only came to kill Packard’s gang, but also because he has accepted that it is just something that can’t be stopped.
Just as Keri is arriving home, the Turbo Interceptor pulls up in front of her. The Wraith then steps out, and in a series of brilliant flashes of light, he sheds his outfit to reveal Jake underneath. Jake soon admits to Keri that he is indeed Jamie, and explains that this new form was the closest he could come to who he once was. He tells her to think of this as a second chance, saying that they were meant to be together. He then leaves her to tend to one last piece of business, but promises that he’ll be back, and strangely tells her that they’re going on a short trip, so she should pack light. He then visits Billy at the diner and says goodbye, and then gives him the Turbo Interceptor. When Billy asks “Who are you, bro?”, Jake replies, “You said it, Billy.” After Jake takes off on his motorcycle, Billy soon figures out that Jake is really his brother, and tearfully calls out to him.
Jake picks up Keri, and they ride off together into the night towards parts unknown. Loomis watches them go from afar, and though he seems to believe that Jake is both the Wraith and Jamie, he makes no effort to follow him.
Thanks Tornado Dragon!