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House II opens in the early 1950s, where we find Charles and Judith McLaughlin handing away their baby Jesse to adoption. This is to protect their child from retribution by a powerful ghost named Slim Razor, who has appeared in the couple’s mansion demanding they hand over a crystal skull. After the couple confronts Slim to reveal that they don’t have it or know where it is, Slim kills them.
Flash forward twenty-five years, and their aspiring artist son Jesse is all grown up, Jesse moves into his inherited but long-dormant home with his girlfriend Kate. Odd artifacts about, including a one that is obviously missing from a mantelpiece. Jesse and Kate are soon visited by Jesse’s rambunctious friend Charlie and his pop-singer girlfriend Lana, aka Puce Glitz.
While looking through the family’s photo albums in the home, Jesse spies pictures of his namesake, his great-great-grandfather Jesse, who was an outlaw from the old West who earned his keep finding lost treasure, including a crystal skull with giant jewels in its eye sockets. Slim Razor also factors into the pictures, elder Jesse’s partner, and details of their falling out over the ownership of the skull are revealed.
An old book on Mexican legends tells more stories about the skull that will unlock the mysteries of the universe and grant everlasting life to those who possess it, as well as the ancient Aztec practice of burial with one’s jewels. Jesse and Charlie determine to dig up the grave of elder Jesse to find the skull. Unearthed, they find the elder Jesse reanimated to life, preserved by the skull’s magical powers, though looking quite old. However, it also returns the spirits of others who’ve been looking for the skull from various times and dimensions, including Slim Razor, who is out to claim what Jesse stole from him prior to abandoning him into the Mojave desert to die.