The movie takes place in the year 1807 in the city of Puebla, New Spain. Leo San Juan, a shy 9-year-old boy, lives with his grandmother and his older brother Nando. Leo is constantly frightened, due to the legend of the Nahuala that Nando told him about. The legend speaks of an old abandoned house, in which "La Nahuala", a witch (who is actually a cook that was possessed by a spirit on Dia de Muertos), lives. 52 years ago, this witch took control of the spirits of 2 little girls, Xóchitl, a servant girl, (pronounced So - CHEE - til), and Teodora, the daughter of the rich couple that owned the mansion. These two little girls are still locked up in the old house along with la Nahuala to this day. Now, la Nahuala is looking for a third spirit, because if she manages to get it on the Día de Muertos, she will obtain all the necessary power to eliminate all of the inhabitants of the city.