The story of Puppet Master is a strange one with the movie initially intended to be released into theaters in the summer of 1989 and onto home video in September 1989, but later pushed back to 12th October 1989 as a direct-to-video release, as producer Charles Band stated in an interview that he would make more money in the DTV field than he would in the theatrical market.
The movie was written by Kenneth J. Hall and David Schmoeller (credited at the time as Joseph G. Collodi) and directed by Schmoeller. It begins in 1939 Bodega Bay, California, an old puppeteer named André Toulon (played by William Hickey) is putting the finishing touches to a living puppet named Jester (voiced by Michael Laide) whilst another living puppet, Khan is watching Blade (voiced by Bert Rosario) out the window as he scouts the grounds of the Bodega Bay Inn that André is staying.
Suddenly two Nazi spies get out of a car and head for Toulon’s room but Blade beats them there and André puts Blade, Jester and Khan into a chest with Gengie, an Indian puppet and hides the chest in a wall panel. Then Toulon commits suicide by shooting himself with a nickel-plated Smith & Wesson .44 Double Action revolver in the mouth with a pistol just as the Nazis break down the door.
The movie then makes a time jump of fifty years and it is now 1989 where we are introduced to four psychics: Alex Whitaker (Paul Le Mat) – who has premonitions, Dana Hadley (Irene Miracle) – fortune teller, Frank Forrester (Matt Roe) – a mind reader; and his girl friend Carissa Stamford (Kathryn O’Reilly) – a psychometrist who can touch an object and give the object’s history. The psychics make contact with an old colleague of theirs named Neil Gallagher (Jimmie F. Skaggs) and conclude that he found André Toulon’s hiding place.
The news of Neil’s discovery unleashes a psychic vision on each psychic that includes blood sucking leeches, death, and Neil pointing a gun at a young woman’s head. Upon meeting Neil at Bodega Bay Inn the woman in the vision is revealed to be Neil’s wife Megan (Robin Frates). They also meet the housekeeper, Theresa (Mews Small).
The psychics are skeptical that Neil took a wife but it is forgotten when Megan tells them that Neil shot himself after researching Toulon’s work. Theresa, Megan, and Alex leave the body, leaving Frank, Carissa, and Dana. Dana stabs a long pin into Neil’s corpse to verify that he is in fact dead.
But as they stay that night at the Bodega Bay Inn it would appear the somethings have awoken and that all may not be as they seem!