The police investigate two bloody corpses in a freight elevator.
At his fur processing plant, owner Jake Feldman accuses his workers of doing substandard work and threatens to fire all of them. His foreman, Lou Chinaski, warns Jake that they have an important meeting but Jake tells him to deal with it and leaves.
Jake goes to a strip club and stops briefly to watch the strippers. He then pays off the bouncer to go in the back for a private session. He enters a dark room with a single chair and calls out to Shanna, waving some dollar bills in the air. Jake sits down and Shanna emerges from the back to dance for him. She tells him that he stinks of rotting flesh, but Jake insists that it’s his work and it’ll make him a rich man some day. The dancer is unimpressed and refuses to let Jake touch her. She demands her money and, once she’s paid, strips for him. He grabs her and Shanna fights back, knocking him away. When he comes after again, she grabs the chair and orders him out. Jake leaves but says that one day she’ll give it to him.
In the woods, trapper Jeb “Pa” Jameson and his son Larry go poaching for raccoons. They go in to a fenced off area where Pa has already placed traps. Larry worries but Pa says that Mother Mayter has been spreading stories for years to keep people off the land. Father and son enter a series of ruins which Pa dismisses as some old city. There are raccoons in all of the traps Pa set. As they go in, Larry notices a carving of a raccoon on the central structure. Pa reminds Larry how to break a raccoon’s throat but admits that sometimes you have to finish them off by bashing in their skulls. He gives Larry a baseball bat and tells him to go to work.
As Pa removes the pelts, Larry calls his father over to examine a trap with a raccoon’s paw in it. Pa points out that a raccoon has to really want to be free to chew off its own paw. Larry looks at his father in disgust and then leaves with him. Pa talks about how much money the new batch of raccoon pelts will make them. As they go, they see Mother Mayter watching them from her cabin and circle around.
At home, Pa and Larry skin the raccoon and are again impressed with how smooth and flawless the pelts are. Pa points out that all of the pelts are identical, as if they came from the same family. Larry says that he has a warm feeling inside from them and Pa leaves him to clean up.
At the strip club, Shanna dances while Jake watches from the audience. Another woman, Mira, watches her with interest. Jake is interrupted by a phone call from Pa, who tells him that he has an outstanding batch of pelts that he figures Jake will pay ten times normal price. Jake doesn’t believe it but Pa insists he has the goods and that Jake will have enough money to buy whatever he wants. As he looks at Shanna, Jake tells Pa that he had better not be joking. Mira leaves with Shanna and Jake decides to go see what Pa has.
In the workshop, an enraptured Larry says how beautiful the pelts are. He starts stroking them and rubbing his cheek against them. He then picks up the baseball bat and goes to his father’s bedroom, and pokes him awake. He then beats Pa to death, echoing his early words that it can take up to fifty swings to kill a raccoon.
The next morning, Jake and Lou arrive and pound on the front door. They discover that it’s unlocked and go inside to the workshop. Jake sees the raccoon pelts and realizes that they’re everything that Pa said. They hear a noise from the cellar and go to investigate. They find Larry, dead, and realize that he put his head into a raccoon trap and triggered it, ripping off the front of his own head. What they don’t know is that he did it under the spell of the pelts.
Jake goes to find Pa and discovers him in his bed, his head beaten in and covered with flies. Lou wonders what happened but Jake is only concerned about the pelts. He wants to make the ultimate coat for the international fur exhibition, Serio, in a month and decides to call the cops anonymously once they pack up the pelts and leave.
Back in the city, Jake has his workers unload the furs. His illegal Asian workers refuse to touch them but Jake dismisses their concerns. Lou warns that they’ll need the perfect model to show off the coat and Jake assures him that he already has someone in mind.
Shanna is having sex with her female client when Jake arrives and has the bouncer call her out. She reluctantly agrees to see him and Jake tells her that he wants her to wear his coat at Serio. Tempted by the idea of a legitimate fashion show, Shanna tells him that she’ll see after he brings her the coat and goes back to her dressing room.
Jake has his man Sergio cut the furs, but soon warns him that he’s doing a poor job and tells him to get better or else. That night, Sergio is drinking in his car and takes out the cutting shears. He smiles, caught in the pelts’ spell, and then begins cutting through his own chest.
The Asian workers reluctantly sew the pelts together. Meanwhile, Lou suggests that they try to get a breeding pair. When Jake realizes the possibilities, he drives back to the Jameson house. He searches the place and finds a map, and then grabs a bottle of Pa’s moonshine. Making his way through the woods and past the barbed wire fence, Jake reaches the ruins and Mother Mayter’s house. She comes out and Jake offers her the bottle in return for some answers. Mother Mayter tells him that he’s been expecting him and invites him in.
As she drinks, Mother Mayter explains that a group of the mysterious pine lights gathered and became sentinels of the lost city. She walled off her land and warns people way to protect the raccoons. Jake laughs but notices that the raccoons have gathered at the cabin windows. He asks if he could have a couple of them and she accuses them of getting the Jamesons killed because of his vanity. She screams at Jake, saying that they’re not finished with him, as he runs off.
Back at his shop, Jake finds that one of the workers, Sue Chin Yao, has died. The previous night she sent all of the workers home while she finished the coat. Once she fell under the pelts’ spell, she took a needle and thread and stitched her own eyes, nose, and mouth shut. Eventually she died of blood loss and collapsed. Jake makes sure that Lou hasn’t called the police and tells him to do but to keep things as quiet as possible to avoid the bad publicity. Lou wonders if the coat is cursed but Jake says that he doesn’t believe in curses. He goes to the coat and strokes it briefly, and then takes it and leaves.
Jake goes to Shanna’s apartment but she refuses to let him in. He holds up the coat and lets her see it through the peephole. She opens the door and he brings it in and offers to let her try it on inside. He puts it on her but then suggests that he might find some other models. Unable to resist the coat’s allure, Shanna lays down on the bed and assures him it’s the only audition he’ll need. Jake drops her pants and takes her from behind as she begs him to stop. Once he’s done, Jake rubs his face in the fur coat and then backs away. He first says he has to find something sharp in her bathroom, but then corrects himself and says he needs to freshen up.
As he walks to the bathroom, Jake takes a knife from the kitchen counter and unbuttons his shirt. Meanwhile, Shanna admires herself and the coat in the mirror and figures she’s done worse for a lot less.
In the bathroom, Jake polishes the knife and then finishes removing his shirt. He then begins cutting into the skin of his own stomach and then the shoulders. Finally he peels off all of skin from shoulders to groin, screaming in agony. He then staggers out into the living room and Shanna looks on in horror as Jake offers her his skin as a vest, insisting it’s his work of art and he made it for her.
Shanna runs away, screaming, and manages to get out the door. Jake chases her down the hallway, still wearing the coat. She gets into the freight elevator and goes to the ground floor. Jake opens the elevator door above and jumps down the shaft, smashing through the elevator roof. He grabs her leg and tries to drag her back, and she hits the elevator button. The door closes on her hand, breaking it off at the wrist.
Later, Lou arrives at Shanna's building and finds the police investigating the deaths of Jake and Shanna, who have bled to death.