Valerie lives with her parents, Cesaire and Suzette, and sister Lucie in the village of Daggerhorn, on the edge of a forest plagued by a werewolf. She is in love with the woodcutter Peter, but her parents arrange for her to marry Henry, son of the wealthy blacksmith Adrien Lazar. Valerie and Peter plan to elope, only to learn the Wolf has broken its truce not to prey on the townspeople and murdered Lucie.
Suzette tells Valerie that her marriage was also arranged, and that she had loved another. The preacher Father Auguste calls upon the famous witch hunter Father Solomon for help, but the townspeople decide to venture into the Wolf's lair. Peter is separated from the group moments before the Wolf kills Adrien. The Wolf is cornered by the men and killed. Valerie finds Suzette mourning Adrien and deduces that he was her love. She realizes that Lucie, the older daughter, should have been engaged to Henry but was his half-sister, the illegitimate child of Adrien and Suzette.
As the village celebrates the end of the Wolf, Father Solomon arrives and declares that the slain animal is a common grey wolf, as the true werewolf would have reverted to human form. He reveals they have entered Blood Moon Week, an event every thirteen years wherein anyone bitten by the Wolf is cursed to become one. Father Solomon's men, led by The Captain (Adrian Holmes), isolate Daggerhorn and investigate the villagers. That night, the Wolf attacks, and the townspeople shelter in the church while Valerie and her friend Roxanne search for Roxanne's autistic brother, Claude. Cornered by the beast, Valerie discovers she is able to understand the Wolf, who threatens to kill Roxanne and destroy the village if Valerie does not leave with it. The Wolf escapes, vowing to return for Valerie's decision.
The next day, Claude is captured by Father Solomon's men. Father Solomon declares Claude, whom he witnessed perform a trick, is a student of the dark arts; when the frightened Claude cannot reveal the Wolf's identity, Father Solomon locks him in an iron elephant. In exchange for Claudie�s release, Roxanne reveals that Valerie is able to communicate with the Wolf, but her brother is already dead. Believing Valerie is a witch, Father Solomon displays her in the town square to lure the Wolf. Henry and Peter help Valerie escape; Peter is captured by the Captain and thrown in the elephant, while Father Solomon orders Henry�s execution. Father Auguste saves Henry, and is killed by Father Solomon.