One rainy night in Santa Barbara, California, Richard Bone's (Bridges) car breaks down in a side road. He sees a large car draw up a little way behind him. A man throws something into a garbage can. At first, Bone thinks nothing of it and proceeds to meet his friend, Vietnam veteran Alex Cutter (Heard). The following day, a young girl who has been brutally murdered is found in the garbage can, and Bone becomes a suspect.
When Bone sees who he thinks is the same man in the Santa Barbara "Founder's Day Parade" – local tycoon J.J. Cord (Stephen Elliott) – Cutter begins to take an interest in the case. His interest soon becomes a conspiracy theory that develops into an investigation with his skeptical friend and the dead girl's sister, (Ann Dusenberry), along for the ride. After Cutter attempts to blackmail Cord as a way of making Cord incriminate himself, Cutter's house mysteriously burns down with his wife, Mo (Lisa Eichhorn), inside.
Convinced that Cord had been trying to silence Bone, Cutter begins researching Cord. He steals an invitation to a party at Cord's house and gets Bone to drive him. When Cutter tells Bone he plans to kill Cord, Bone attempts to leave the party but is blocked by other parked cars and instead goes after Cutter to convince him not to kill Cord. After being chased by security, Bone winds up in Cord's office. After a brief conversation in which Cord assumes that Cutter's war experience has made him paranoid, Cutter suddenly crashes through the window after stealing one of Cord's horses. As Cutter is dying from injuries from the broken glass, Bone asserts that Cord killed the girl. Bone steadies Cutter's gun in Cutter's hand and shoots Cord as the film cuts to black.