Following the accidental death of his mother Renee during production of her latest film, thirteen-year-old Jeff Matthews and his veterinarian-father Chase move to the Maine town of Ludlow. Jeff learns about the Creed family, and about the cursed Indian burial ground. His friend Drew's dog, Zowie, is fatally shot by Gus Gilbert - Drew's stepfather, who also happens to be the town sheriff - for chasing Gus's pet rabbits. It doesn't help that Gus was in love with Renee 20 years ago; ever since she turned him down to marry Chase, Gus has been venting his ire on everything and everybody around him.
Jeff and Drew bury Zowie at the Indian cemetery, in order to bring the dog back to life. It works, with some side effects: Zowie is uncharacteristically fierce; the dog's eyes have an unnatural glow to them, even in daylight. Gus grounds Drew for skipping school to bury Zowie (because Gus demanded that he do so). Chase treats Zowie for his gunshot wound, which refuses to heal; even more bizarre is the fact that Zowie has no heartbeat. Chase sends a sample of Zowie's blood to a lab. It turns out that Zowie's cells have completely deteriorated and are no different from those of a dead canine.
Jeff goes to the pet cemetery on Halloween for a night of horror stories, notably about the Creed murders. The still-grounded Drew goes along on his mom's orders; she wants to get even with Gus for repeatedly and unfavorably comparing her to Renee. Gus comes to the cemetery looking for Drew. He beats up his stepson after chasing off all the other kids save Jeff, who is swatted away like a fly when he tries to stop Gus's bullying. Gus rips up a gravemarker and is about to hit Drew with it when Zowie appears and fatally mauls Gus...whom both boys subsequently bury at the Indian cemetery. Gus returns to life; he now moves stiffly and rarely speaks, but does treat his wife and stepson better. Gus becomes increasingly crude and sadistic, sexually assaulting Drew's mother and brutally skinning his pet rabbits for supper.
Zowie breaks out of the veterinary clinic and kills three cats, before entering Chase's home and attacking him. Chase's arm is injured. A day later, Jeff encounters school bully Clyde Parker - who is about to sever Jeff's nose using the wheel-spokes of his own motorcycle when Gus shows up. He sends Jeff home, then murders Clyde as Drew looks on.
Gus traps Drew inside their house with the savage Zowie. Drew escapes through a window just as his mother arrives home. Gus's police car chases them down the highway; he finally kills them both, by forcing their car into a collision with a truck. Gus drags Clyde's body off to the cursed burial ground: "I'm takin' you up the hill, Clyde, buddy. That's the way the Indians did it."
That night, Jeff decides to reanimate his mother by using the Indian burial ground`s power. Gus exhumes her corpse, and brings it to Jeff at the burial ground. When Chase hears that his wife's grave has been robbed by Gus, he rushes to the Gilbert house. There he is attacked by Zowie...and then by Gus, wielding an electric drill. Chase shoots and kills them both.
Upon coming back to life, Renee stabs and kills Marjorie Hargrove - the Matthews' housekeeper. Jeff confronts his undead mother in the attic and they embrace. Chase arrives home and urges Jeff to get away from Renee, who says she wants to spend quality time with her husband. An undead Clyde arrives and tries to kill Jeff...first with an ax, and then with an ice-skate. Renee locks Chase and both boys in the house, which she then sets on fire.
Jeff kills Clyde with a severed insulated cable, then breaks down the attic door to reach his father. Renee wants Jeff to stay and join her in death, saying she loves him, but Jeff drags his father out of the house as Renee is destroyed by the flames. Her last words are, "Dead is better!"
Jeff and Chase leave Ludlow for Los Angeles.

Question: Why did Gus ground Drew?
Answer: Drew was grounded because he skipped school to buy Zowie in the Indian burial ground.
Alternative answer: For skipping school