Two English tourists, Liz Hunter (Magrath) and Kristy Earl (Morassi), meet with an Australian man, Ben Mitchell (Phillips), at a party, and they decide to spend the rest of their holiday with him. The young trio plans to drive to Wolf Creek, a large crater formed by a 50000 ton meteorite, and explore the area.
Upon returning to their car after hiking down to the crater, the group discovers that the car won't start and, unable to discover the problem, prepare themselves to sit out the night. After dark, a "Crocodile Dundee"-like character named Mick Taylor (John Jarratt) comes upon them and offers to show them to his camp to repair the car. The group allows Mick to take them to his place, a spot which is apparently an abandoned mining site. Mick regales them with tall stories of his past while making a show of fixing the car. His manner unsettles Liz and Kristy, although Ben is less impressed.
Liz awakens to find herself tied up in a shed late the next afternoon. She manages to escape and as night falls she discovers Mick torturing Kristy by shooting at her, tormenting her and sexually abusing her. She sets the group's car alight to cause a distraction and, as Mick is busy putting out the fire, goes to help Kristy. Liz then attempts to shoot Mick with one of his own guns, but the bullet merely grazes his neck and leaves him unconscious. The women flee the camp with Mick's truck, as they do so the two realize he is alive after all. After narrowly avoiding Mick, who is now out searching for them, the women return to the camp to steal another car. Liz leaves the hysterical Kristy outside the gates, telling her to escape on foot if she does not return in five minutes.
Liz enters a garage and discovers Mick's large stock of cars as well as an organized array of travellers’ possessions, including video cameras. She watches the playback on one of them and is horrified to see Mick "rescuing" other travellers stranded at Wolf Creek in almost identical circumstances to her own. She then picks up another camera which turns out to be Ben's. She gets into a car and attempts to start it but Mick shows up in the back seat, announces himself with a haunting chuckle, and stabs her through the driver's seat with a huge bowie knife. He then lops off the index finger, middle finger and ring finger on Liz's left hand in one swipe. While Liz slowly dies from blood loss, Mick uses the opportunity to sever her spinal cord in order to temporarily paralyze her to prevent her from escaping. He then tortures her into revealing the location of her surviving friends.
By dawn, Kristy has reached a tarred highway and is found by a passing motorist. He goes to grab a blanket from the boot but is distracted by a bullet hole in his flask, then he is subsequently shot dead (a bullet though the head/eye) from an impressive distance by Mick. Kristy attempts to escape in the motorist's car, but unfortunately for her the chase is short. The action now cuts to Ben, whose fate until now was not revealed. He awakens to find himself nailed to a mock crucifix in a mine shaft. He manages to extract himself and enters the camp in early daylight. From this it could be assumed that the scene is taking place at approximately the same time as Mick is away from the camp chasing Kristy, but the time line of the film is never clear. Ben escapes into the desert, eventually passing out beside a dirt road where he is rescued by two Swedish travelers and taken to safety.
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