Sally, Adam, Watch, and Cindy are wandering around town when they come across some weird blocks of ice. Watch thinks there's something strange about the blocks. The surface temperature of each one is way below what it should be and there looks like there might be something trapped inside. After dragging one of the blocks into the woods, they start a fire.
The fire melts some of the ice and reveals a man inside. His arm comes loose, Watch touches it, and the hand grabs him. The man eventually escapes, grabs Watch, and runs off into the woods with him. The others go to see Bum, the former mayor of town who is now viewed as a crazy guy. Bum tells them that it sounds like the guy was one of the Cold People.
Years ago, there were two different continents: Atlantis and Mu. Star People came down in spaceships and asked to help the world. Both went to each continent and said that the other would kill them. There was also something about making the people live forever. Atlantis residents eventually realized that the Star People were evil. When they came down again, they launched all their weapons at Mu, and Mu launched theirs at Atlantis. It caused both to sink into the ocean.
Bum tells them that their only hope is Mr. Patton, the crazy guy who runs the local army surplus store. He agrees to help Sally convince him to give them weapons, while Cindy and Adam go to the police station. Getting no help, they run back to the station. Mr. Patton gives them all weapons and heads outside. The Cold People attack, bullets do nothing, and they find themselves trapped inside the store.
Luckily, Mr. Patton has a stock of hot air balloons for some crazy reason. While they put the balloons together, Adam and Cindy take flamethrowers downstairs to keep an eye on the building. The Cold People attack, and they fight them off. One of them grabs Adam's ankle, and while he escapes, he notices that his ankle seems numb.
When they take off on the balloons, it only gets worse as the numbness travels up his leg. They find Watch wandering around in the woods and see that the crazy witch in town is trying to keep the Cold People away. Watch is infected to the point where he tries to attack them when they land. Adam gets him pinned against a wall, and Watch kind of recognizes him but still seems crazy. They subdue him and throw him on one of the balloons before Sally has to use one of the flamethrowers on a Cold Person, who melts into a puddle of blue liquid.
After flying around town for a few hours and watching the Cold People attack everyone, they split up. Sally steals a car with Adam, but then Watch attacks them. They get to the reservoir, and Adam uses some dynamite he "borrowed" from the store to set off a massive fire that basically sweeps across town and melts everything and all the Cold People. He and Watch both recover, and Watch makes a joke about getting ice cream.
*The only cop in town says that there was once a whole force but that he hasn't seen another cop in months. After some thought, he realizes it's been years.
*He also tells them that he can't go after Watch because his parents might have a life insurance policy on him, which would be like taking money out of their pockets.
*Sally keeps a journal and gets all embarrassed when someone suggests it's all about Adam. Me thinks this will come back again later.
*There's a whole plot about how the Cold People are vampires and have something in their blood that infects others, which is what happened to Watch and Adam. It was a little lame.
*Sally not only knows how to drive, but she also knows how to hot wire a car.