Mercy Falls, a secluded children's hospital on the coast of the Isle of Wight is being closed down and the children transferred to the new hospital in the middle of the island. Temp nurse Sarah (Calista Flockhart) has arrived to assist in the move which has been delayed by a massive train accident that has filled up the new hospital with patients. Working as the night nurse, Sarah discovers that the children live in fear of a "mechanical girl" called Charlotte. After her predecessor dies, Sarah starts to believe this unseen presence might be responsible for the mysterious fractures a child patient developed and various child deaths over the years. Another mysterious death has Sarah believing in a ghostly, evil presence living on the closed off second floor that means to hurt the children and she must convince head nurse Folder (Gemma Jones), skeptical Dr. Marcus (Richard Roxburgh), and concerned nurse Helen (Elena Anaya).

Although the protagonist is given a traumatic backstory, Balaguero's film quickly does away with the "is-it-real-or-all-in-her-head" question and instead focuses the suspense on figuring out exactly what and who the haunting presence is. Although there are the expected whispers and booms on the surround track and shadows zipping by in the foreground and background of shots, Balaguero takes a more subtle approach than he did with his only US theatrical release so far DARKNESS towards telling a story more in step with his more intimate first feature THE NAMELESS (which Dimension dumped onto DVD with no fanfare). Performances are good all around and, as a result, the film is quite moving in spots (like the aforementioned THE NAMELESS) even if the film feels only slightly hobbled by conceding to recent horror film trends (some of which Balaguero contributed to with the aforementioned DARKNESS).