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Local resident and adventurer Burt Gummer comes home to Perfection from a successful, international Graboid/Shrieker hunt, only to find that life in the town has returned back to normal. The new owner of Walter Chang's general store is Walter's niece Jodi, and a thrill-seeker named Jack Sawyer has set up a "Graboid Tour" featuring a faked attack by the creatures. An obnoxious would-be land-developer, Melvin Plug, is attempting to contract housing estates around the town. After a small earthquake, Jack Sawyer's assistant is eaten by a Graboid while conducting a tour.
Burt quickly organizes a search and destroy party composed of local residents but a team of meddling scientists arrives, sent by the US government when Nancy Sterngood contacted the authorities. Burt is forced to disband the hunting party, but he still tries to lure one of the monsters, an albino dubbed "El Blanco", onto his property so he can kill it in "self-defense". Faced with the prospect of his property being confiscated using eminent domain, Burt reluctantly agrees to help the government scientists capture a live graboid. The first hunting expedition does not go well however and Burt is swallowed alive by a graboid, only to be miraculously rescued by Jack.
Meanwhile, the government scientists have gone hunting the graboids on their own and are killed when they are ambushed by shriekers; the graboids have metamorphosed into the next stage in their life cycle. Burt organizes another search and destroy party, this time to hunt down the shriekers before they can multiply. They trail the shriekers to a box canyon but are trapped by El Blanco, which seems to be a mutant without the ability to metamorphose. When they finally free themselves, the shriekers are gone and have been replaced by hitherto unknown winged beasts who become airborne by blasting jets of flames from their rear ends. As the creature flies in to attack, it knocks Miguel, an original survivor from the first movie off the cliff, killing him. He is not eaten, however. Jodi dubs them "ass-blasters." They quickly learn that ass-blasters use infra-red vision too just as the shriekers do.
The hunting party retreat to Burt's home but, while Burt has taken every conceivable precaution against graboids and shriekers, he didn't allow for the possibility of an aerial attack. An ass-blaster crashes through the ceiling and the hunting party is forced to use Burt's emergency escape tunnel. Meanwhile, attacked in Jodi's store by a lone ass-blaster, mother and daughter Nancy and Mindy Sterngood accidentally discover that once it is satiated with food, instead of engaging in asexual reproduction like a Shrieker it enters a comatose state, allowing them to capture it.
Burt leads the party to a nearby junkyard where, using an improvised weapon which is part potato gun and part flaming arrow, they manage to kill all but one of the remaining ass-blasters. Finally Jack tricks El Blanco into eating the last one.
In the epilogue, Nancy and Mindy sell the captive ass-blaster to a wild-animal act in Las Vegas. El Blanco has been declared by the federal government to be an endangered species, foiling Melvin's plans for a housing project. The long-time residents have taken appropriate precautions allowing them to coexist with El Blanco and keep their homes.
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