A former cult movie director is in a mental institution, where he's been for the past thirty years. His therapist thinks that it will help him deal with his obsession of his last film--a horror film--if he is able to watch it again. But what happens is terrible--almost everyone is slain and the director disappears. Years later, a small town theater has a showing of that same movie. An investigating detective--and a doctor, the only surviving member of the institution, show up, expecting the madman to show up. He does, but it's not in the way they expect...
Basically, MIDNIGHT MOVIE this has the same premise as the movie DEMONS, with a group of people trapped in a theater--and the monster comes out of the screen to kill them. What I like about MIDNIGHT MOVIE is that it wholeheartedly embraces the "slasher" subgenre and has fun with it.