Twenty years ago, in the sleepy mining town of Valentine Bluffs, a methane gas explosion at Hanniger Coal Mine trapped five miners in a shaft when the foremen of the crew left early to attend the town's Valentine's Day dance. Six weeks later, the sole survivor of the accident, Harry Warden, was rescued; he survived by eating his dead coworkers and ultimately had gone mad. After a year in a mental institution, he escaped on Valentine's Day, killing and cutting out the heart of the guilty foremen, leaving a warning that the same would happen if the town ever again held a Valentine's Day celebration.
With the legend of Harry Warden nothing but a distant memory, a group of young miners and their girlfriends decide that the town has gone without a party long enough. As the night of the dance approaches, a murderous maniac in mining gear begins dispatching townsfolk in bloody and creative ways. The town sheriff and mayor quickly deduce it must be Harry Warden, who was returned to the institution, though their attempts to confirm Warden's status are hindered. Despite the murders, the young adults continue with their plans for a dance, laughing off the "stories" of the murderous Harry Warden. Finally the night of the dance is reached and as the Miner dispatches off several partiers, a group decides to venture into the mines to explore and impress the women. Realizing that a killer is on the loose, a rescue party composed of best friends T.J. and Axel go after the others and Sarah, who both men love.
The Miner has indeed followed them into the mine, killing most of the group, and forcing T.J., Axel, Sarah and Patty to try to escape. Axel appears to be killed and Patty is murdered as well leaving only T.J. and Sarah. On the surface the Mayor and Sheriff have found out that Harry Warden died 5 years ago and are preparing to lead a group of men into the mines. In the mine, the Miner attacks T.J. and Sarah on a moving rail line and the fight eventually is forced into an abandoned shaft where the integrity of the ceiling is in doubt. Sarah manages to remove the mask of the Miner to reveal the killer is in fact not Warden, but Axel. A flashback reveals that he witnessed the murder of his father, one of the foremen, by Harry Warden when he was a boy.
The ceiling then collapses, burying Axel alive. Only his arm is visible, but as rescue efforts are taken it is soon discovered that Axel has cut off his own arm to escape. Through the hole in the wall, T.J., Sarah and the police watch as the deranged and delusional Axel tells T.J. that he will be waiting in Hell for him runs deeper into the mine calling out to Harry Warden telling him that he is coming. He warns them that he an Harry will be coming back and asks Sarah to be his "Bloody Valentine". The film ends as Axel runs deeper into the mine and sang "daddy gone away harry warden made you pay" himself, the screen goes black and the audience can hear the sound of Harry Warden laughing but he stops as the credits roll.