Dylan and his brother Steve live on Fear Street but somehow have never had any weird experiences, which annoys Dylan because he really wants to see a ghost. After talking about it with his brother, they hear a strange crashing sound outside, which turns out to be their dad cutting down trees to make room for a new swimming pool. With the trees gone, Dylan can see the outline of a tree house in the woods.
He convinces his brother to go with him into the woods to find the tree house. They notice that the boards are black and that it looks like it went through a massive disaster. As they walk home, Dylan also notices that the temperature suddenly gets warmer the closer they get to their house, which is proof that the tree house is haunted. It doesn't help when they see a weird light near the tree house later that night.
They head out to investigate and come across sisters Betsy and Kate in the woods. They are supposedly visiting from Connecticut, but I totally don't trust them. Betsy makes a cryptic comment that makes Dylan think it's haunted, but then the two run off before they can ask any more questions. While this might make me run, it makes Dylan want to renovate it. He bribes his brother to help him take down some of the old boards and restore the tree house.
Dylan has a few weird experiences there. While climbing up the ladder, he thinks he runs into the ghost and that it tries to choke him, but it's actually just a spiderweb. Then he and Steve are working on the house when he goes up the ladder and almost gets hit in the face with the hammer. Though he thinks that it's his brother, Steve went back to the house earlier.
Later that same day, they run into the sisters again, and Betsy finally decides to tell them the story. A bunch of kids built the tree house years ago and spent the night there after finishing it. Lightning struck the tree and set fire to the house. They were stuck inside and died. Every since then, anyone who tried to fix the house suffered bad luck. Duncan was one boy who spent the most time out there. He got hit in the head with a hammer, and his family left town without telling anyone if he lived or died. That seems a little odd.
None of this dissuades Dylan though. He heads back to the tree house to do some more work. He ends up nearly falling and cracking his head open when a rung on the ladder breaks. When he finally gets to the tree house, he sees that someone carved Stay Away in the tree.
Yet that still doesn't stop him. He and Steve plan an overnight stay in the tree house to look for ghosts. Steve immediately falls asleep, but Dylan sees the floorboards moving. Just as he's about to scream, a head pops up and it's his parents looking for him. They take him home and he hears them talking about how they're worried about him and his obsession with ghosts. He and Steven then sneak out of the house again.
When his brother falls asleep, he sees a pair of glowing eyes in the woods and flips out. No worries though, it's just a stray cat. He then hears some strange noises and wakes up his brother. They both see a pair of eyes and freak out, but before they can do anything, they see another pair of eyes. Turns out that it's the sisters and they're the ones pulling all the "ghost" stuff on them. Steve makes him go home and acts like he always knew it wasn't real. Dylan decides that he needs to get back at the sisters right away.
After a few days of normal stuff, Dylan sees a light in the tree house. Thinking it's the girls, he convinces Steve to dress all in black, sneak outside, and scare the crap out of them. When they get out there, they find a real ghost standing in the tree house! Turns out that his name is Corey and he was one of the kids who died in the fire. He kept getting stronger with the more work they did, and he wants them to keep working. Dylan offers him a deal: he'll keep working if Corey helps them scare the girls.
The girls come over a few days later. Corey pops up and tries to scare them, but then they turn see through and fly up to meet him in the air. Yeah, so they were apparently his sisters and the other ones in the tree house. They somehow got separated after the fire and haunted different areas of the woods. The trio chase them out of the house and into the woods. They don't attack though, they just thank him for helping them come back together and disappear.
After all this, Steve really just wants to go home. He went into shock after seeing the girls and it took him some time to talk again. They start wandering through the woods, get turned around, and have no idea how to get home again. When they turn around again, they find a clearing with an old-fashioned swingset in it and a little ghost boy sitting on it. He asks them for help and Dylan sighs, thinking "Here we go again." Well dude, you're the one who wanted to see a ghost!