On October 30, Devil's Night in Detroit, Police Sergeant Albrecht (Ernie Hudson) is at the scene of a crime where Shelly Webster (Sofia Shinas) has been beaten and raped, and her fiancĂŠ Eric Draven (Brandon Lee) then died on the street outside, having been stabbed, shot, and thrown out of the window. The couple were to be married the following day, on Halloween. As he leaves for the hospital with Shelly, Albrecht meets a young girl, Sarah, who says that she is their friend, and that they take care of her. Albrecht tells her that Shelly is dying.
One year later, a crow taps on the grave stone of Eric Draven; Eric awakens and climbs out of his grave. Meanwhile, a low level street gang, headed by T-Bird (David Patrick Kelly), is setting fires in the city. Eric goes to his old apartment and finds it derelict. He has flashbacks to the murders, remembering that those responsible were T-Bird and his gang: Tin Tin, Funboy, and Skank. Eric soon discovers that any wounds he receives heal immediately. Guided by the crow, he sets out to avenge his and Shelly's murders by killing the perpetrators.
The crow helps Eric locate Tin Tin; Eric kills him by stabbing him in each vital organ (in alphabetical order) with his own knives and then takes his coat. He then goes to the pawn shop where Tin Tin pawned Shelly's engagement ring the year before. Eric forces the owner, Gideon, to return the ring. Eric then tosses rings telling Gideon each of them is a life, a life Gideon helped destroy. He lets Gideon live so that he can warn the others, but when Gideon calls Eric street grease, he says, "Is that gasoline I smell?". Terrified, Gideon runs out and Eric blows up the shop, just as Gideon barely escapes. Eric finds Funboy getting high with Sarah's drug-addict mother, Darla. After killing Funboy with an overdose of morphine, Eric talks to Darla, taking the drug out of her arm seemingly by magic and making her realize that Sarah needs her to be a good mother. He visits Albrecht, explaining who he is and why he is here. Albrecht tells him what he knows about Shelly's death and that he watched as she suffered for thirty hours before dying. Eric touches Albrecht and receives from him the pain felt by Shelly during those hours. Sarah and her mother begin to repair their strained relationship. Sarah goes to Eric's apartment and talks to him. She tells him that she misses him and Shelly. Eric explains that, even though they cannot be friends anymore, he still cares about her.
As T-Bird and Skank stop at a convenience store to pick up some supplies, Eric arrives and kidnaps T-Bird. Skank follows the pair to the docks and witnesses Eric kill T-Bird by tying him to the driver's seat of his car and forcing him to drive it off the edge of the pier where it explodes and sinks into the harbour. Skank escapes and goes to Top Dollar, a top-level criminal who controls all the street gangs in the city. Top Dollar and his lover/half-sister Myca have become aware of Eric's actions through various reports from witnesses. Top Dollar holds a meeting with his associates where they discuss new plans for their Devil's Night criminal activities. Eric arrives looking for Skank. A gun fight ensures the deaths of nearly all present, and Eric kills Skank by throwing him out of a window. Top Dollar, Myca, and Grange, Top Dollar's right-hand man, escape.
Eric, having finished his quest, returns to his grave. Sarah goes to say goodbye to him and he gives her Shelly's engagement ring. She is abducted by Grange, who takes her into the church where Top Dollar and Myca are waiting. Through the crow, Eric realizes what has happened and goes to rescue her. Grange shoots the crow as it flies into the church, making Eric lose his invincibility. Myca grabs the wounded crow, intending to take its mystical power. Albrecht arrives, intending to pay his respects to Eric, just after Eric is shot and wounded. Top Dollar grabs Sarah and climbs the bell tower as a fight ensues, and Grange is killed by Albrecht. The crow escapes Myca's grip, pecking her eyes out and sending her down the bell tower to her death. When Albrecht is wounded, Eric climbs to the roof of the church on his own. There, Top Dollar admits ultimate responsibility for what happened to Eric and Shelly. In their fight, Eric, despite being fatally stabbed in the back, gives Top Dollar the thirty hours of pain he absorbed from Albrecht; the sensation sends Top Dollar over the roof of the church to be impaled on the horns of a gargoyle. Sarah and Albrecht go to the hospital, and Eric is reunited with Shelley at their graves. Sarah ends the film with a narration: "If the people we love are stolen from us, the way to have them live on is to never stop loving them. Buildings burn, people die, but real love is forever."

Question: What happens to Albrecht when Eric touches him?
Answer: Albercht re-lives and feels the pain that Shelby felt when she died.