Jeff Talley is a hostage negotiator in Los Angeles. The film begins with Jeff negotiating with a man who has taken his wife and son hostage after learning she has been cheating on him. Jeff Talley has been watching the situation for a while, and eventually, Jeff hears three gunshots in the house. He runs inside through the barricaded door and finds the man and his wife dead. In the boy's room he finds the dying son, who passes away in Jeff's arms. This leaves Talley emotionally scarred. Soon after, Jeff moves with his family to become police chief in Bristo Camino, a (fictional) peaceful suburban hamlet in Ventura County, California.
One year after the incident that ended his career with the LAPD, Talley finds himself in yet another hostage situation. Two teenagers, Dennis and his brother Kevin, and their mysterious accomplice Marshall "Mars" Krupchek take hostage Walter Smith and his two children, a teenager and a young child, in Smith's house after a failed robbery attempt. The first officer to respond to the robbery, Carol Flores, is brutally shot twice by Mars right before Talley and a fellow officer arrive at the scene. As Talley attempts to rescue the seriously injured officer with his police SUV, the officer dies in front of him. Traumatized by the officer's death and unwilling to put himself through yet another life-or-death situation, Talley hands authority over to the Ventura County Sheriff's Department and leaves the scene.
Unfortunately for Talley, Smith has been laundering money for a mysterious criminal syndicate through offshore shell corporations. He was preparing to turn over a batch of important encrypted files (recorded on a DVD) when he was taken hostage. To protect such incriminating evidence from discovery, the syndicate orders one of their representatives who is known only as the Watchman to kidnap Talley's wife and daughter, and forces him to return to the scene and stall for time until the organization can launch their own attack against Smith's house.
Back at the scene, Talley learns that Mars Krupcheck is a serial killer, who could turn on the hostages and his own accomplices at any moment. Eventually, Mars does, in fact, kill Kevin, and immediately afterwards kills Dennis. At this point, the syndicate sends a force of fake FBI troopers in to recover the DVD, and they storm the house. Mars, during this time, is stabbed in the cheek by the teenager hostage, and she and her brother flee. Mars pursues them relentlessly, but is unable to catch them before they lock themselves in the reinforced security center of the house. Talley hears the children screaming as they flee Mars via the teenager's cell phone, and storms in after the FBI agents. Mars, seeing him coming in, throws a Molotov Cocktail at him, destroying his patrol car. Mars continues onwards to kill the majority of the fake FBI agents using his pistol and multiple Molotov Cocktails, but is shot by the only surviving agent in the side with a rifle. Regardless, he makes a reappearance, distracting the lone surviving FBI agent long enough for the agent to be shot and killed by Talley. Mars then lights the room that he, the hostages, and Talley are in with one of his two remaining Molotov Cocktails. As he prepares to throw the last bomb and kill everyone in the room, he collapses to his knees, weakened by the wounds in his torso and blood loss. He makes eye contact with Jennifer, who he was apparently infatuated with, then drops the Molotov Cocktail. Mars dies as he drops the bomb, lighting himself on fire and vanishing in a pillar of flame. Talley then guides the hostages out, safely evacuating them. Talley and Walter Smith then go to the inn where Talley's wife and daughter are being held hostage by the Watchman and several other masked armed men. Talley frees Smith, hoping to save his family, and Smith, grateful for his own family being saved, shoots the Watchman in the head, allowing Talley to kill the other masked men. Talley and his family then walk out with Smith, ending the movie.
According to the movie's official production notes, the movie's plot is roughly the same as the novel; the main difference is that a complicated subplot involving the Mafia was removed and the ages of the first group of hostage-takers was lowered slightly. In the novel, Smith's employer is Sonny Benza, a crime overlord whose influence reaches throughout the entire West Coast.
Vehicles of the fictional Bristo Camino police department and paramedic fire and rescue service are featured heavily in the film. The logo for the Bristo Camino police department features a Black Bear in a mountain setting, and has since seen use in clothing items and memorabelia. Bristo Camino also appears to have influenced the name of an unsigned indie band in Leeds, England.
The movie's opening scenes were filmed in the Boyle Heights neighborhood of Los Angeles, just east of downtown.