Red Lake Falls, MI 1918
Luciana: “Let me go, Sebastian! Imagine how famous I’ll be when I’m immortalized in wax! I have to go!”
Sebastian: “Luciana, I know you’re the all-important beauty queen and star of the family, but you’re still my sister, and I forbid you to go.”
Luciana: “I know you’ve always been jealous of me, Sebastian. But this is my big break! Don’t be foolish!”
Sebastian: “If you only knew... I’m trying to protect you. How dare you call me a fool!”
Almost a hundred years after the incident, an investigator comes to Red Lake Falls to investigate the dark dimension. As soon as the train stops, an eerie blue light attracts the attention of the investigator, who notes in his diary that Red Lake Falls has disappeared after an earthquake in 1918. Before making his first step however, a stroke of lightning hits a nearby tree stump and a ghostly image of a girl appears calling for help. The investigator is quick to realise that the girl’s fate is tied to the dark dimension.
The first clues that the investigator finds upon entering the city reveal the opening of a wax museum, a girl named Zoe, and the earlier ghostly image of a teenage girl dressed for the beauty pageant. She says that she wanted to win so that she could get a scholarship and so leave this small town for good. She also reveals that she won, but her twin brother Sebastian ruined everything when he went to work for the wax museum. By looking at the pageant results, the investigator comes to the conclusion that this girl must be Luciana Costello.
To gain entry into the inner part of the city, a gate must be opened. However the gate is not just closed by a simple lock, but by living wax that keeps it shut. It is the investigator’s inventiveness that makes it look easy. More clues indicate that Sebastian was constantly a failure since when he was still a small boy, and Luciana was the star of the town. However, he finally had the opportunity to work for a famed wax master, Madame Sharon Holloway.
Soon after, the investigator meets another ghost with a scarred face, that of the young girl named Zoe, who is the wax master’s daughter. She supplicates to her mother to make her beautiful, and leads the curious visitor inside the wax museum which stands atop a floating piece of land above Red Lake Falls. There he meets Madame Holloway, who doesn’t want him poking around. And to make her point she opens a rift in the ground, making the inner hall unreachable. At this stage there are also some clues about a journalist named Sybil Bannet who seems to have gone missing.
The investigator finds a newspaper article which explains that everyone who attended the wax museum’s opening ceremony went missing. Not only that, but the dead have gone missing too! One of the presentation attendees was Sybil. She was apparently trying to help Sebastian, but Sebastian did not reciprocate her feelings towards him. At this point, Sebastian started visiting Madame Nadine, the town’s new fortune teller.
Things start getting more suspicious as the investigator finds a film reel which shows that during the beauty pageant, Sharon notices that Lucy has a birthmark on her face and decides to make her out of wax. Mr. Bowden, the undertaker, had received a note from Madame Holloway explaining how they should use one of her concoctions to force their victims to fall into a deep slumber. However, it seems that they have had an argument about his payment. Mr. Bowden threatened that he would reveal that the wax figures were being made from corpses, but this was his downfall.
More clues are found in the Costello family’s house. Lucy wrote on her diary that she wanted to help her brother when he started frequenting Sybil and Madame Nadine. The ghostly image of Sebastian then reveals that he had fallen for Sybil until he realised that she was insane, but he went to the fortune teller because he thought that Sybil had put a love spell on him. The problem was that Madame Nadine then asked him to tell Lucy to pose for a wax figure.
Sebastian recalls that Lucy had asked him to go to the wax museum with her, but he tried to stop her from going. When she went anyway, he followed her, but then he did not remember what had happened afterwards. A visit to the wax museum reveals that the wax figures look too life-like. Madame Holloway then tells the investigator that he won’t stop her from completing her collection with a few more figures.
All is made clear when the investigator finds the diary of the wax-mistress, who in her notes writes that she had met a group of people who had convinced her that she could make her daughter perfect again. So she started to experiment upon the people of Red Lake Falls. The Nelumbo cult is suspected of corrupting Madame Holloway and causing the dark dimension. The apparition of Zoe crying for help motivates the investigator to carry on.
A door which was protected by a puzzle mechanism leads into an internal garden. Luckily there are enough things lying around to help the investigator get into the greenhouse, which in turn leads into the inner chamber where Madame Holloway conducted her rituals. Here Lucy’s ghost says that a black book is needed to solve the mystery.
By following the book’s instructions, Sharon’s spell is lifted. In the end she repents for what she has done, and mourns the death of her daughter before getting sucked by an unknown force into the dark dimension. There is little time for the investigator to complete the ritual, and then the place starts falling apart. Wax starts to flood through the floating city, which crushes into the buildings below. The sun starts shining again and all is well in the wax city of Red Lake Falls.