The film starts with a direct reference to the previous two films. Katie (Katie Featherston) –- several months before the events of parts 1 and 2 –- drops off a box full of VHS tapes at the house of her sister Kristi (Sprague Grayden) and Kristi's husband Daniel (Brian Boland). A quick sequence of shots establish that the video tapes were the only items stolen during the break-in that touches off the events of "Paranormal Activity 2."
We then cut directly to the content of those video tapes, which follow young Katie (Chloe Csengery) and Kristi (Jessica Tyler Brown) in 1988, living with their mother Julie (Lauren Bittner) and her wedding videographer boyfriend Dennis (Christopher Nicholas Smith) in Santa Rosa, California.
From here events play out much like the other two films. There are unexplained noises, items moving or breaking without explanation, and an increasing sense that something very unwelcome is watching this otherwise happy family. Dennis sets up cameras around the house and even has his friend and colleague Randy (Dustin Ingram) grab some books on the supernatural to explain the activity. We also begin to see Kristi talking to an unseen presence, who she calls "Tobi." This is the first time in the series that the malevolent entity is given a name. As fans of "Paranormal Activity" have suggested, Tobi is in fact Asmodeus, a powerful demon from the real-life Book of Tobit, and referenced in all three major Abrahamic faiths.