Vampire explorers in Iraq uncover an ancient tomb, which they believe belongs to Dracula, the first vampire. To keep Blade from interfering, they frame him for the murder of a human familiar. FBI agents subsequently locate Blade's hideout and kill his mentor and friend, Abraham Whistler. Demoralized, Blade surrenders and is arrested.
Posing as federal marshals, the vampires persuade the authorities to turn Blade over to them. He is rescued by private investigator Hannibal King and Abigail Whistler, Abraham's daughter, who invite Blade to join their band of vampire hunters, the Nightstalkers. From them, Blade learns that Danica Talos, an old enemy of King's, has revived Dracula, or "Drake", with the goal of using his powers to cure vampires of their weaknesses. As Drake is too powerful to kill via normal means, the Nightstalkers have created an experimental bioweapon known as Daystar, capable of killing vampires at the genetic level. However, they have failed to make it effective.
Eager to test Blade, Drake isolates him from the Nightstalkers, as he considers them unworthy of challenging him. He explains that all humans and vampires are inferior in his eyes and that he intends to wipe them from the Earth. Abigail finds evidence of Drake's true plan: a network of farms where humans are drained of their blood for vampire consumption. In an act of euthanasia, Blade deactivates the farm's life support systems.
Returning to the Nightstalkers's hideout, they find all of them dead except for King and a young girl named Zoe, who have been taken captive. A recording left by Daystar's creator reveals that Blade's blood is needed to render it effective, but only at the cost of his life. King is tortured by the vampires for information, but refuses to talk, even when they threaten to feed him Zoe's blood.
Blade and Abigail arrive and free the captives. Drake easily bests Blade in single combat and prepares to kill him with an arrow filled with Daystar. At the last second, Blade stabs him with it, triggering a chemical reaction that kills Danica and the rest of her followers. As Drake slowly succumbs to his wounds, he praises Blade for fighting honorably, but warns him that he will eventually become a vampire.
From here there are several different endings:
Theatrical ending: Using the last of his power, Drake disguises himself as Blade. The FBI recover the body and declare Blade legally dead, allowing him to continue his war against vampires.
Unrated ending: Blade faints and is captured by the FBI, while Drake's body is not recovered. Seconds before his autopsy, Blade awakes and attacks a nurse. It is not clear whether Blade has become a vampire as Drake predicted, or if he is simply thirsty for blood. This is the ending seen on the director's cut of the film, and commentary on the DVD indicates it was the ending Goyer intended.
Werewolf ending: With Daystar having exterminated the vampire race, Blade formally retires from hunting. King and Abigail reestablish the Nightstalkers and turn their attention to a new foe: werewolves. This version of the ending was used in the novelization of the film and is included on the DVD as an extra.
Output: In the werewolf ending, who reestablishes the Nightstalkers?