In the haunted Marcosa House, the Werewolf and Jack Russell topple over a landing. Jack catches himself on a tapestry, while the Werewolf lands on the floor and turns his attention to Topaz and Elaine Marston. Jack swings from the tapestry onto the man-beast, and they grapple while Topaz uses her psi-powers to calm the Werewolf. She succeeds and the beast reverts to the peasant who claimed to be the spirit of the lycanthrope.
The spirit tells them what they seek lies within the stone gargoyle over the house's entry, but then his face melts and he vanishes in a burst of flame, while from the darkness, the sound of Belaric Marcosa's wooden leg and his laughter echoes.
Jack's sister Lissa screams and the trio rush to her room to find her hanging from a noose held by their step-father Phillip. When Jack tries to tackle him, Phillip disappears and the hysterical Lissa drops onto her bed. Elaine sedates her, then they discuss their next move as they try to find the means to restore their critically injured friend Buck Cowan.
Jack recalls the stone gargoyle, and they go out the front door. Noticing their car has sunk into the bog stranding them, they barely dodge the gargoyle which drops and shatters on the steps. Rolling from the pieces is a skull with a hole in its forehead. They take it to the dining room, where Elaine, a paranormal researcher, tells the tale of Belaric Marcosa: he was a wealthy occultist of the late 19th Century. He replaced his lost left leg with a wooden one ending in bird-like talons. Well-to-do guests had sought him out for favors and cures for ailments, but his mental powers made prisoners of them, forcing them to descend into debauchery and savagery for his amusement. A psychic vampire, he drained their lifeforces, until they withered away.
The story done, Jack turns away for a moment, and finds Topaz and Elaine have vanished. The skull begins to emit mystic energy, which again transforms Jack into the Werewolf despite the next full moon being weeks away. He roams the house as arms emerge from the walls, a chandelier falls, and sudden flames accost him, seemingly herding him toward a closed door. The Werewolf bursts through and find Elaine stabbing a woman on a bed. Then the restored gargoyle, having come to life, attacks the man-beast. Elaine runs out as the Werewolf shatters the gargoyle.
He reverts to Jack, who turns to see that Elaine's victim is Topaz. He picks up her dead body and carries her into the foyer where another horrific sight awaits him: Belaric Marcosa stands on the landing above and between them Buck dangles from a noose.