Paranormal Activity 3: The Unanswered Questions
Here's the entire Paranormal Activity movie trilogy summarized in chronological order, with the connections between the films pointed out. It should go without saying that THERE ARE MAJOR SPOILERS IN THROUGHOUT THIS ARTICLE.
How does Paranormal Activity 3 tie into the other films?
Paranormal Activity 3 is set in 1988 when sisters Kristi and Katie are young (5 and 9, respectively). It is meant to chronicle the events that the girls cannot fully remember in the first two films - namely the demonic entity first coming to haunt them. The girls' mom has a boyfriend, Dennis, who begins to film the phenomenon happening in their home. The mom, Julie, has decided not to have any more kids - much to the chagrin of her mother (the girls' grandmother), Lois. A mysterious symbol drawn on a crawl space ceiling in the girls' room leads Dennis to a book about a coven of witches in the 1930s who served demons by brain-washing girls of child-bearing age into having sons for the demon to collect, before wiping away the child-bearer's memory of the event. Dennis tries to show this explanation to Julie, but she will not buy it.
The demon makes a bond with Kristi, in particular (which she refers to as her friend "Toby"). After repeated attacks, Kristi eventually promises to do the demon's bidding in order to save her sister from harm. Kristi begs her mom to take them from the house to grandma's house (apparently, the demon's request), but Julie, still in denial, refuses. For "motivation," the demon then tears apart the kitchen in front of Julie, which sends her running off to grandma's house with the kids. Thinking they are finally safe, Julie awakens in the night to the sound of cars pulling up to Lois' home. It is then revealed that Lois is part of the coven of witches from the '30s that Dennis saw in the book, and that she serves the demon terrorizing them (she had the same symbol hidden on her wall that the demon drew on the crawl space ceiling). Gathered with the rest of her coven, Lois watches as the demon kills Julie and Dennis. She then leads her granddaughters up the stairs to an unknown fate, with the demon in tow.
Paranormal Activity 1 & 2
Jump to 2005, when an adult Katie delivers stuff from Lois' old house (Lois has seemingly died) to a pregnant Kristi and her husband Dan. This includes a necklace and a box of old video tapes (Dennis's 1988 tapes AND a set of tapes labeled "1992"). A year later, after Kristi has given birth to her son, Hunter, a "burglary" occurs at her home. Every room is completely trashed except for Hunter's bedroom, but the only things stolen are the necklace and the video tapes. Soon after, strange paranormal events begin to occur in Kristi and Dan's home. Their housekeeper Martine claims it is an evil spirit, tries to protect the family via prayer and incense - and gets fired for her trouble by Dan, who will not even begin to entertain thoughts of the supernatural being real in any form. Upon visiting, Katie and Kristi reminisce about that mysterious period from their childhood (which they cannot recall) that led to their family being broken, and their childhood home burning down. The events happening in Kristi's home seem vaguely similar to deep-seated feelings the girls have of that childhood trauma; Katie is worried Kristi will 'end up like their mother.'
Kristi's step-daughter Ali begins to research demonic mythology, and discovers that humans could make deals with demons for wealth and power, in exchange for the soul of their first-born sons (a deal seemingly made by Lois and her coven, or Lois' mother - possibly the founder of the coven). If the deal maker didn't have a son, the demon would haunt the deal maker's family until a male heir could be collected. Kristi's infant son Hunter is revealed as the first male heir to be born into their family since the 1930s (Lois had hoped Julie would break that cycle, and encouraged her to have more children - but no such luck).
The paranormal activity in Kristi's home begins to escalate; at one point, Kristi herself is dragged down into the basement by the demon and is kept there for hours. When Kristi is released, her family finds the basement door covered in scratches, with the word "Meus" (Latin for "Mine") scratched in the door (either meaning Kristi or Hunter or both belong to the demon). Ali becomes convinced that Kristi has been corrupted by the demon and convinces her father of this by showing him footage of Kristi being dragged into the basement by some invisible force. Dan calls in Martine (the nanny he previously fired), who informs him that he cannot exorcise the demon completely - but he can pass the demon off to another family member. To protect his own family he decides to sacrifice Kristi's sister, Katie. After a frightful confrontation with a possessed Kristi, Dan, Ali and Martine succeed in their plan and free her from the demon using a cross. Dan burns a photo of a young Katie (that Julie took on the girls' first day of school) to complete the ritual (this seems to be the same photo that a few weeks later shows up in the attic of Katie and Micah's home). Afterwards, Kristi has no memory of being possessed.
Katie, meanwhile, has just moved into a new home with her boyfriend Micah. When strange paranormal activity begins to occur in their home, Katie confesses to Micah about the strange events from her and Kristi's childhood - events which repeated when Katie was a teenager (age 13) and now and again throughout her adult life (a time we still haven't seen in the films). She says that it's felt like she's always been haunted by something, though Micah is skeptical. Nevertheless, Micah begins to record the happenings and Katie eventually hires a psychic to assess the situation. The psychic (who states his expertise is not in demons, but in ghosts) reveals that the demon feeds off of negative energy; emotional friction between Katie and Micah is only strengthening it. Events escalate as Katie finds the photo of herself that Dan burned (she thought it lost in the house fire from her childhood) and starts to show signs of being possessed by the entity. Katie visits Kristi (3 weeks after Dan sent the demon her way) and explains the strange events occurring in her home. Dan reveals nothing about what happened to Kristi.
As more and more havoc is wrought, Katie and Micah try to reach out to a demonologist - but he is out of town. Frightened, they meet again with the psychic, who is instantly panicked by the malevolent presence in the house and flees the scene. When Katie is eventually physically assaulted by the demon, she and Micah decide they will flee to a hotel. Before they can leave, however, Micah discovers Katie gripping a cross (the one used to free Kristi) so tightly that her hand is bleeding. He burns the cross and the photo of Katie in anger, and an eerily tranquil Katie then informs him that all is well. Micah believes her, reluctantly.
The next night, Katie awakens in bed and watches over Micah sleeping before disappearing downstairs. Micah awakens to the sounds of Katie screaming as if being murdered/attacked and runs downstairs to aid her. Heavy footsteps are heard on the stairs, and then Micah's corpse is flung at the camera, revealing a fully-demonic Katie as his murderer. The next night, demon-Katie appears at Kristi's house and murders Dan and Kristi, before taking young Hunter into her arms and disappearing (Ali was not home at the time), with her whereabouts still unknown after three films.