Emily Jenkins (RenĂŠe Zellweger) is a social worker living in Oregon, who is assigned to investigate the family of ten-year-old Lillith Sullivan (Jodelle Ferland), as her grades have declined and an emotional rift with her parents has emerged. Emily suspects that the parents have been mistreating Lillith. Emily's fears are confirmed when Lillith's parents try to kill her by gassing her in the oven at home. Emily saves Lillith with the help of Detective Mike Barron (Ian McShane). Lillith is originally sent to a children's home, but she begs Emily to look after her instead. With the agreement of the board, Emily is assigned to take care of Lillith until a suitable foster family comes along. In the meantime, Lillith's parents, Edward and Margaret (Callum Keith Rennie and Kerry O'Malley) are placed in a mental institution.
Not too long after Lillith moves in, strange things begin to happen around Emily. Two weeks later, another of Emily's cases, a boy named Diego (Alexander Conti), suddenly murders his parents, and Barron informs Emily that somebody phoned Diego from her house the night before the crime. As she is suspected of involvement in the incident, Lillith undergoes a psychiatric evaluation by Emily's best friend, Douglas J. Ames (Bradley Cooper). During the session, however, Lillith turns the evaluation around, asking Douglas what his fears are and subtly threatening him. That night after receiving a strange phone call, Douglas is panicked by a mass of hornets coming out of his body in hysteria and kills himself in his bathroom.
Emily gradually becomes fearful of Lillith, so she heads to the mental asylum for answers from Lillith's parents. They tell her that, far from being truly human, Lillith is actually a demon like-Succubus who feeds on emotion, and that they had tried to kill her in an attempt to save themselves. Lillith's father tells Emily that the only way to kill Lillith is to get her to sleep. Shortly after Emily leaves the asylum, Lillith's mother hallucinates being on fire, and her father is stabbed in the eye after attacking a fellow inmate through whom the voice of Lillith spoke. Barron initially thinks Emily should seek psychiatric help, but is later convinced when he receives a strange phone call in his home from Lillith. He arms himself to help Emily. However, he fatally shoots himself in the head with his shotgun, as Lilith makes him imagine he is being attacked by dogs.
After realizing that her closest colleagues have been eliminated, and that the rest of her cases will be next, Emily serves Lillith tea spiked with sedative. While Lillith is asleep, Emily sets fire to her house, hoping to get rid of her. However, the girl apparently escapes unharmed (from this point on, the audience may wonder whether Lilith is really present or Emily is hallucinating her presence). A police officer offers to escort Emily and Lillith to a temporary place to sleep. As Emily is following the police cars, she suddenly takes a different route and drives her car at a high speed, hoping to bring fear to Lillith. Instead, Lillith forces Emily to relive her childhood memory of her mother driving fast in a rainstorm. Emily fights through the memory, telling herself that it is not real. The image fades, and Lillith appears scared by the fact that Emily was able to fight through her illusion.
Emily drives the car off a pier. As the car sinks, Emily struggles to lock Lillith (now in her demonic true form) in the trunk. Emily then attempts to swim to the surface. The demon grabs Emily's foot to stop her from swimming away but Emily struggles and eventually breaks free, as a trapped Lillith sinks to the bottom. Emily climbs out of the water and sits on the pier.

Question: Why did the social worker think that Lilith was being abused?
Answer: Lilith was not doing well in school and was having problems communicating with her parents
Alternative answer: Lilith's grades have declined.