Noroi
The Curse
(2005)

A paranormal researcher named Kobayashi, who documents his exploits on video, has recently taken to task the ancient legend of Kagutaba, a demon who possessed people in rural Japan. At the beginning of the film, we are shown that after he finished his research, his house caught fire, killing his wife. Kobayashi disappeared and is still missing.

At the beginning of his research, Kobayashi interviews a women and her child who report they heard strange baby noises from the house next door, occupied by an estranged woman named Junko Ishii and her son. Kobayashi senses something bizarre when Junko flat out ignores his attempts to question her.

Back to his research, Kobayashi meets a women with a "sixth sense" named Marika, who on several television shows has encountered weird phenoma and even been semi-possessed. Through a psychic television program, Kobayashi also finds Kana, a young girl who shows extreme promise as a psychic, but soon goes missing. Kobayashi eventually encounters a mentally unstable psychic named Hori, who can predict and forsee danger. It is because of Hori that Kobayashi learns of Kagutaba, and the village it was spawned from. Along his journeys, Kobayashi interviews several people who all mention a crazed female neighbor who never socializes and always moves away.

Almost all of the people Kobayashi encountered begin to disappear, or commit suicide under weird circumstances. Along with Hori and Marika, Kobayashi visits the village where Kagutaba had first been released. All the people are somewhat distant, but a few of them mention Junko Ishii, who it turns out is the daughter of the town priest, and was the victim of the Kagutaba possession. She now lives in the priest's house. Kobayashi finds Junko dead, having hung herself. Kana is also laying nearby, dead, and Junko's son, from the beginning of the film, is next to her unconscious.

Believing the Kagutaba demon to be dead, having been killed after Junko committed suicide, Kobayashi adopts her son. While they are having a nice dinner at home, Hori runs in claiming the demon is still alive. He grabs the boy and begins to violently beat him with a rock, before he stops suddenly. The boy rises, bloodied, and Hori, now possessed by the child, hits Kobayashi in the head with a rock and leaves with the boy. Unable to move, Kobayashi watches helplessly as his wife, possessed, lights herself on fire, which burns down the house. Kobayashi runs out and the film ends.

Thanks Patrick D!