The film begins with a news report covering events at the end of the previous film. The report reveals that Baby (Sheri Moon Zombie), Otis (Bill Moseley) and Captain Spaulding (Sid Haig) miraculously survived the shooting and they will be tried for their crimes. The trial was widely covered and a cause for celebre, with many people protesting that the three were innocent. But all three were found guilty sentenced to prison.
Captain Spaulding was executed by injection, but Otis was reunited with his stepbrother Winslow Foxworth Coltrane. Both of them escaped from prison for some work outside the prison and were also in the process of killing Rolando, who was in the same work crew but did not recognize Otis.
The baby did not succeed in seeking parole, but his mental condition worsened. Otis and Foxy are free to plan to release Baby from prison. They took the family hostages as well as friends of Wargen Virgil Dallas Harper, demanding that he help Baby slip out of prison or they would kill them all.
Harper follows orders and sneaks Baby out of prison disguised as a guard, but Otis and Oxis still kill everyone. The three of them decide to flee to Mexico, the decision is made more urgent because Baby’s actions are unstable. The three travelled to a small town in Mexico celebrating Day of the Dead.
They were briefly worried about being recognized but ignored this concern, not realizing the hotel owner recognized them and had warned Rondo’s son Aquarius to their location. The owners keep them busy with celebrations, so they don’t move to other areas.
Tomorrow Baby is bound to Sebastian, who is watching Aquarius coming. He warned Baby about the dangers before running to warn Otis, just as Aquarius’s troops entered the brothel. Sebastian and Otis detained them until Foxy arrived and rescued them, after which Otis separated from them finding and killing the hotel owner.
During this time Baby escaped killing several of Aquarius’ men using bows and arrows he took from Harper’s house. In the end, Baby and Foxy were captured by Aquarius. Otis and one of Aquarius’s forces fought while Sebastian, who had been shot and left during Baby and Foxy’s capture, slipped towards the top and freed Otis’s relatives.
Aquarius was angry, distracting his people in battle and allowing Otis to win. He, Foxy and Baby defeat Aquarius, but Sebastian is shot dead in the process. The film ends, the trio burns Aquarius before walking towards the city.