Aaron Boone dreams of Midian, a city where monsters are accepted. At the request of girlfriend Lori Winston, Boone is seeing psychotherapist Dr. Phillip Decker, who convinces Boone that he committed a series of murders. Decker is actually a masked serial killer who has murdered several families. Decker drugs Boone with LSD disguised as lithium and orders Boone to turn himself in.
Before he can, Boone is struck by a truck and taken to a hospital. There, Boone overhears the rants of Narcisse who seeks to enter Midian. Convinced that Boone is there to test him, Narcisse gives Boone directions before tearing the skin off his face.
Boone makes his way to Midian, a city beneath a massive graveyard. He encounters supernatural creatures Kinski and Peloquin. Kinski says that they should bring him below, but Peloquin refuses to allow in a normal human. Boone claims to be a murderer, but Peloquin smells his innocence and attacks him. Boone escapes only to encounter a squad of police officers led by Decker. Boone is gunned down after Decker tries to get him to turn himself in and then yells that Boone has a gun.
Due to Peloquin's bite, Boone returns to life in the morgue. When he returns to Midian, he finds Narcisse there and he is inducted into their society by the Nightbreed's leader Dirk Lylesburg. In an initiation ceremony, he is touched by the blood of their deity Baphomet.
Seeking to understand why Boone left her, Lori investigates Midian. She befriends a woman named Sheryl Anne and drives out to the cemetery with her. Leaving Sheryl Anne at the car, Lori explores the cemetery, where she finds a dying creature. A female Nightbreed named Rachel pleads for Lori to take it out of the sunlight. Once in the shadows, it transforms into a little girl who is Rachel's daughter Babette. Lori asks after Boone, but is rebuffed by Lylesburg and scared off by Peloquin. While leaving the cemetery, Lori discovers Sheryl Anne's corpse and her killer Decker. Decker attempts to use Lori to draw Boone out of hiding. Boone rescues Lori and Decker learns that Boone cannot be killed due to his transformation. Decker escapes and Boone takes Lori into Midian. Rachel explains to Lori that the monsters of folklore were peaceful beings who were hunted to near-extinction by humans. Boone and Lori are banished from Midian by Lylesburg. Decker learns how to kill the Nightbreed and murders the residents of the hotel where Boone and Lori are staying. When Boone discovers the crime scene, he is unable to control his thirst for blood and begins drinking. The police find Boone and take him into custody. At Decker's urging, the police form a militia led by Police Captain Eigerman. A drunken priest named Ashberry joins them as God's servant in their upcoming battle against Midian. Lori, Rachel and Narcisse rescue Boone, and the four return to Midian where Boone convinces the Nightbreed to stand and fight.
During the battle, Ashberry learns that there are women and children among the Nightbreed. When he tries halting the attack, he is beaten by Eigerman. Ashberry finds the idol of Baphomet and swears allegiance to it. When he is splashed by its blood, he is burned and transformed. Boone learns from Lylesburg that Baphomet plans to destroy Midian. Boone argues to release the Berserkers, a monstrous feral breed that were imprisoned due to their insanity. When Lylesburg is killed before he can open the cages, Boone releases them and the Beserkers turn the tide of battle. Decker confronts Boone and is killed. When Boone faces Baphomet, Baphomet says that Boone has caused the end of Midian which has been foretold. Baphomet charges Boone with finding a new home for the Nightbreed and renames him Cabal.
Boone leaves Midian with Lori and meets with the remaining Nightbreed in a barn where he says his goodbyes to Narcisse and promises to find a place where they will be safe. In the ruins of Midian, Ashberry stands in front of Decker's corpse and states that he wants vengeance on Baphomet and the Breed. When he presses Baphomet's blood to Decker's wound, Decker springs back to life with a scream as Ashberry repeatedly hollers "Hallelujah."

Question: Who killed Sheryl Ann?
Answer: Decker