A guy's girlfriend is horribly killed in his small urban legend filled town and he and his friends basically become The Hardy Boys investigating The Blair Witch. One of his buddies reveals that he has "The Book of Lore", which details all of the local legends. And it just so happens that the girlfriend was killed in a very similar way as one of the stories, with her fingernails stuck in her eyeballs. There are a bunch of memorable, weird characters, including the asshole African American Sheriff who thinks our main character is a criminal, the creepy Jesus Lady and the freaky dude with the skull ring whose family runs the local funeral home. I particularly liked the black and white/grainy flashbacks when one of the local legends is being recounted.
BOOK OF LORE is a well-written, well-shot, well-acted feature that's extremely ambitious considering its non-Hollywood budget. If you want to see a good example of a recent "Do-it-Yourself" horror movie, here it is. Highly recommended.