Kelsey lives on Fear Street, which means that nothing scares her. Her cousin and best friend Drew, who is just a few weeks younger than her, is pretty much scared of everything. Their parents rent a house every year and they go to the boardwalk, but Drew is usually too scared to go on any rides. This year, she convinced him to go on the biggest roller coaster. On the way back to their house, they find a mysterious fortune teller shack.
Madame Valda calls them by name and invites them inside. When she mentions Drew's last name, Kelsey sees that he has his name on his beach pass and giggles. She points it out to them and they get a kick out of it. Madame Valda gets pissed off and sends them away with a warning that they will soon know that her powers are real.
When they run off, she attacks them, grabbing Kelsey's arm and staring her down. They finally escape, but they get lost. They see a weird dog following them, and when it pins them in a corner, the dog suddenly disappears. Every time they go a little further, they find themselves back in the same place. Just as they're about to give up, they realize that they're only a few blocks from their house.
Kelsey's mom welcomes then home, but then Kelsey notices a card laying on the ground. It's the same card that the gypsy tried to give them back at her shack. She tries to ignore it long enough to go to sleep that night, but then she notices a weird feeling on her legs. The weird feeling grows and takes over her entire body. That's when she realizes that there are crabs crawling all over her, and crabs just so happen to be her greatest fear. By the time she gets to a mirror and turns on the lights, the crabs are gone. BTW, sand crabs are easily the scariest thing in the world.
When she gets up the next day, she finds the Fool card from the gypsy in her room, even though she ripped it up the night before. She explains to Drew what happened, tears the card into tiny pieces, and throws the pieces in the ocean. They then go swimming, but when he leaves her alone, jellyfish attack her. The harder and faster she swims, the further she gets from the shore. She feels them clinging to every part of her body and finally makes it back to the shore. When she starts screaming, Drew calmly points out that there are no jellyfish on her. Then they find the Fool card sitting on the beach once again whole.
They decide to go back and talk to the gypsy, but they find another much younger woman there. She claims she's the only gypsy working in the area and that there was never anyone else there. Kelsey tells her about the curse and shows her the card. The gypsy says it's the Fool Card Curse and that destroying it isn't easy or cheap. She has to pay the gypsy $10 and wear an amulet for three days. The gypsy does a little chanting, marks an X on the card, and puts it in a metal box.
While hanging out on the beach, Kelsey sees a horsefly attack her. Suddenly, a swarm of the flies attack her and she thinks she might die because she can't breathe. She runs to the water, but Drew catches up with her and tells her there are no flies. Just as she starts to calm down, she looks over and sees the Fool card on the beach again.
They go back to the young gypsy, who now has jeans on under her dress and blonde hair with her dark wig on the table. She says that she still has the card locked up, but when she opens the box, she finds a picture of Kelsey with a red X drawn over her face. Since this chick is clearly just a teenage girl, she has no idea what to do. When they tell her the name of the gypsy, she says that woman was the most powerful gypsy in the world and that she died more than 100 years ago.
She does offer to take them to her uncle though. He tells them that the gypsy was evil and used her powers for badness, and now I so want to sit down and watch Thinner. Her people killed her. They choose a boy and girl to sneak into her tent and poison her, and then they threw her body in the water. He can help them get rid of the curse but it will take some time.
Gregor, the uncle, tells her that she needs to get a jellyfish, a sand crab, and a horsefly and bring everything to him at midnight. Drew can help her, but she has to catch each of the items herself. She manages to find everything but almost drowns when tracking down the jellyfish. Drew saves her with a pole he finds in the lifeguard hut.
Gregor does some random chanting and then tells her that she needs to eat each of the items she brought him. She gets down the fly and crab, which she imagines (like I would) that it's still alive. Kelsey almost chokes on the jellyfish but eats it took. Gregor then announces that she needs to throw something of the gypsy's into the fire. Since she doesn't have anything, she thinks that she's dead.
Drew points out that she still has the card. Gregor, who clearly has no idea what he's doing since he's just reading from a book, warns her that it might not work. According to his book, they need to use something like clothing or jewelry. He then changes his mind and says it will work, so she gets ready to toss it into the fire. They then hear the sound of the gypsy's cruel laughter.
The gypsy says that everyone there is a fake or a fraud and that she's the only real gypsy among them. Kelsey tries to toss the card in the fire, but the gypsy blows out a burst of hot air that sends it flying. She tries to grab it a few times, but it always flies away from her. Kelsey finally gets it and throws it through the gypsy's body, which causes her to go up in a cloud of smoke.
A few days later, Kelsey and Drew are in Shadyside and checking out a little carnival. They seen an ad for a fortuneteller, but Drew is too scared to go look at it. She tells him that it's nothing and shows him that it's just one of those glass boxes with an animated figure inside like the one from Big. They laugh about how it's nothing to be afraid of and start to walk off when the figure warns them about fools and starts laughing.