Phoonk ends with the killing of Madhu, the woman who casts a black magic spell on Rajiv's daughter Raksha. Phoonk 2 begins with Madhu's ghost returning from the grave to seek revenge on the family. On bagging a new construction project, Rajiv moves with his family to a new place. Raksha and Rohan begin exploring the new place and the surroundings- the lonely beach and then the woods behind the house. The terror begins with Raksha and Rohan finding a doll in the woods and then it progresses to a series of highly traumatising experiences for the whole family. Manja, the only man whom Rajiv could turn to, meets a gruesome death at the hands of the black magic woman Madhu's ghost, who has risen from the grave to avenge her own death to seek vengeance on Rajiv, by torturing his loved ones- his wife Arati and their children, Raksha and Rohan.