The film begins with a voice over by its protagonist, Tom Van Allen (Val Kilmer), describing recent violent and chaotic events in his life as we view a scene of a room on fire, with a partly-incapacitated Tom (dressed in a suit) sitting propped against a wall playing a trumpet. Amidst the flames we can see a suitcase, a large quantity of loose cash and mementos including a photograph of a beautiful young woman. Apparently close to death, and contemplating the morality of his actions and their role in his doom, Tom begins to describe events that have led up to this moment.
Tom introduces himself both as Tom Van Allen (professional trumpet player) and also his alter ego Danny Parker (speed freak), expressing confusion about his own identity and actions. Tom's voice-over continues with a brief history of the psychostimulant drug crystal meth (methamphetamine) that has played a central role in his misfortune. In a series of quick vignettes, accompanied by Tom's voice-over, we are introduced to the invention of methamphetamine and use in Japan prior to and during WW2, its prescription use in the USA by housewives in the 1950s, speculation about its use by JFK in the early 1960s, its criminalization and distribution by organized crime in the 1970s, and finally its current (2000s) widespread production (seen to be hazardous) by 'cooks', distribution by a variety of amateur criminal entrepreneurs and use by addicts ('tweakers').
Next we jump to a scene of Danny Parker at a group drug binge that has been going on for three or four days. Crystal meth and other substances are in use and various drug-addled behaviour is on display. In voice over, Tom informs us he has sought out this lifestyle, but for a reason. The party is interrupted as Kujo (Adam Goldberg) announces: 'We're out of gack [meth]!' Danny and his friend Jimmy the Finn (Peter Sarsgaard) leave the drug-house (unsure as to whether it is midnight or noon) to purchase more meth from the dealer Bobby Ocean (Glen Plummer). Danny and Jimmy find Bobby completely intoxicated and agitated, yelling and beating at his distressed wife who is stuffed under a mattress. Bobby threatens them with a spear gun but after some confused word-play eventually agrees to sell them six 'eight-balls' (1/8 ounce packets of meth).
Danny and Jimmy return to the drug house where the party continues with more meth snorting and crazed behaviour. As things wind down, with most of the guests unconscious, a stoned Danny sits ruminatively and Tom's voice over continues: 'You know you've hit bottom when you can't go any lower... (but) sometimes you see the world so clearly... just what you should have done and just when you should have done it.' as he watches the remains of a bottle of beer held horizontally in his hand drip into a puddle on the floor. It is apparent that drug use and some kind of past trauma have taken an extremely negative toll on Danny.
Danny telephones and makes contact with two plainclothes police detectives Morgan and Garcetti (Doug Hutchison and Anthony LaPaglia) to inform on Bobby the dealer, providing them details on the drugs and weapons Bobby is holding. Presumably the next day, we see that Bobby's apartment has been raided and Bobby lies shot to death in the street, still holding his MAC-10 machine pistol, as his distraught wife and daughter watch from a balcony.
In the evening Danny returns to his apartment in a run down building, meeting Collette (Deborah Kara Unger) in the corridor. Collette, a faded beauty obviously on the down and out, is nervous and agitated but Danny is kind to her and introduces himself before she slams her apartment door in his face. In the bathroom of his apartment, Danny removes his t-shirt to reveal a tattoo covering his entire back, showing a figure of death looking down into water, the silhouette of a barren tree with a sunset behind and 'The Salton Sea' inscribed below in Gothic script. Danny removes his tweaker garb and ornaments, washes the green dye out of his hair, and puts on his suit and a wedding ring, concealing the tattoos. In an apparent ritual he looks at items from his past, including the photo of the young woman, and switches to his trumpet player persona, repeating: 'My name is Tom Van Allen. I am a trumpet player'. He begins to play his trumpet and we see a flashback of Tom and his spectacularly beautiful wife Liz (Chandra West), on the beach at the Salton Sea with the sun setting as Tom plays the Miles Davis 'moody piece' 'Saeta' as she listens. Liz suggests they stay and sleep on the beach, but Tom does not agree: 'We should get going'. Back in the apartment Tom says: 'OK we'll stay' as he recalls the sun setting behind the mountains of Anza-Borrego Park to the west. Fish are dying on the beach, as the Salton Sea is a man-made chemically-polluted body of concentrated salt water in a desert valley depression well inland from LA, and the film's central metaphor.
Next, Danny is meeting with Morgan and Garcetti again, this time in a Roman Catholic church. Danny has friendly banter with Morgan, but the abusive Garcetti arrives and they inform Tom that his role as an informer must end because his cover is blown and he is in danger of being executed in a horrible manner by the Mexicali Boys, a gang affected by Danny's previous snitch work. Danny walks home, now paranoid about being in danger and again a silver BMW sedan with the license plate 'I FORGIV' seems to be following him. Luckily, he escapes in an alley.
Fearful about his safety, Danny buys a .357 magnum revolver and bullet-proof vest from a youthful arms dealer (Mpho Koaho) that Jimmy had met in the Del Amo fashion mall. Returning home Danny meets Quincy (Luis Guzman) in the hallway, beating on the door of Collette's apartment and verbally abusing her. As Danny examines his purchases in his apartment the sounds of domestic violence can be heard from across the hall.
Next Danny is sitting by a marker in a graveyard when a large garishly-ornamented pickup truck pulls up, piloted by Bubba (BD Wong) a wiry Asian-American in cowboy attire with a peculiar Texas accent. A deal of some kind is imminent. Later Danny, in a bar with Jimmy, explains that 'in dire need of cash', he wants to take part in the purchase of a large quantity of meth from Pooh-Bear, a major dealer that Jimmy has connections to. Bubba will finance the deal. Jimmy warns Danny about Pooh-Bear but agrees to help.
Danny and Jimmy drive out into the desert in Jimmy's dilapidated Ford Pinto to meet Pooh-Bear, Jimmy explaining that Pooh-Bear has no nose, it having been removed surgically because he had done too much meth. At Pooh-Bear's (Vincent D'Onofrio) desert ranch, the JFK assassination is being reenacted with costumed pigeons secured in a radio-controlled toy truck, that is shot up by Pooh-Bear's associates as Danny and Jimmy arrive. Danny and Pooh-Bear (wearing a plastic prosthetic nose) negotiate a deal for about 30 pounds of 'glass' (high grade meth) at $8K a pound. It is apparent that Pooh-Bear is an unbalanced and extremely dangerous monster who tortures and kills other drug dealers.
Later, in a surreal scene in a pool hall, Kujo, Danny, Jimmy and others discuss an absurd plan to steal Bob Hope's stool sample and sell it on e-bay while an elderly man in a wheel chair does a remarkable karaoke rendition of Lou Reed's 'Take a walk on the wild side', a song about transformation. Coincidentally, Quincy and Collette are also in the pool hall. Danny and Collette exchange glances.
Returning home later, Danny meets Collette in the hall of their apartment building, she having been beaten and locked out by Quincy. Danny and Collette go for coffee and she explains her situation as he listens kindly.
Danny meets with Bubba again regarding the drug deal with Pooh-Bear, and Bubba informs him that the initial deal will be for $10K only. After this conversation ends, Danny is intercepted, tazered and beaten by Morgan and Garcetti, who are not pleased that Danny has been organizing an independent drug deal without informing them. Morgan and Garzetti instruct Danny that he will 'roll over' on Pooh-Bear. Danny agrees and sees the silver BMW again on his way home.
In his next meeting with Morgan and Garcetti, Danny is informed that the menacing silver car is registered to third grade school teacher Nancy Plummer. Danny is shocked to hear this and suffers a barely concealed breakdown or migraine attack. This is soon explained as Danny, dressed as Tom Van Allen, approaches a luxurious house with the silver BMW (license plate 'I FORGIV') in the driveway. It is the home of Tom Van Allen's wife Liz's parents Nancy (Shirley Knight) and Verne (R. Lee Ermey). Liz's photograph that we have seen before is displayed prominently on the wall. Nancy refers to Liz's murder and expresses extreme concern about Tom's condition. Tom tells Verne that Nancy has been following him downtown and that he wants to be left alone.
Danny travels to Pooh-Bear's ranch and is immediately robbed of the $10K by two of Pooh-Bear's associates, Little Bill and Big Bill (Danny Trejo and Josh Todd) and then accused of working for the police by Pooh-Bear. Danny is interrogated by Pooh-Bear who uses a caged badger ('Captain Steubing') to torture individuals he suspects of treachery. Danny, in a tight spot, manages to talk himself out of this by fingering Little Bill, who is found to be holding the $10K. Pooh-Bear releases Danny and with Little Bill and Captain Steubing interacting in the background the first meth deal is done. While Pooh-Bear is momentarily distracted, Danny manages to duct-tape his .357 magnum handgun to a concealed location on the underside of Pooh-Bear's kitchen table, where such deals take place.
Soon after he returns to his apartment, Danny finds Collette at his door and lets her in. She has been beaten and Danny tenderly embraces her, but cannot respond to her attempts to kiss him. She prepares to leave but Danny asks her to stay as he now wants to talk. He tells her about what happened at the Salton Sea and the scene flips to flashback. Having left the beach on Tom's insistence, Tom and Liz have got lost in the labyrinth of back roads near the sea and stopped at a randomly selected house to ask for directions. After receiving advice from the house's occupants (a group of very strange men), Tom delays their departure further by asking to use the bathroom. As he does so Liz, looking increasingly fragile and terrified, sees meth lab materials scattered about the house. In the bathroom, Tom hears dogs barking and soon afterwards the house is invaded by two masked gunmen with police boots firing AK-47 automatic rifles. The house occupants die in a hail of bullets and Tom is hit once in the shoulder while Liz ducks behind a couch. Unfortunately, Liz's presence is detected, and as Tom watches in horror through a bullet hole in the bathroom door, she is shot in the head. The source of Tom/Danny's post traumatic stress is now apparent. 'I could have done something' Tom tells Collette back in the apartment. She reassures him that they would have killed him as well if he had revealed himself. Recovering somewhat, Tom informs Collette of a plan he has to rid her of her tormentor Quincy.
Next Danny is picked up by Bubba and taken to FBI headquarters. Bubba turns out to be a FBI agent and at a meeting with other FBI personnel Bubba explains that Tom Van Allen (a.k.a. Danny Parker) has been carrying out an independent very unorthodox investigation of his wife's murder, that occurred at a meth lab near the Salton Sea. Tom was shown a single red hair found on his wife's body by a police investigator, and silently recalled that he had seen a red-haired man with a distinctive college ring at the Salton Sea on the day of the murder. From this Tom on his own has tracked down a red-haired Detective Gus Morgan working at the Palmdale Police Department. To pursue the lead further Tom has assumed the role of Danny, a tweaker, and bumped into Morgan and his partner Garcetti with the aim of investigating whether they were the gunmen that murdered his wife. To a sceptical FBI audience, Bubba explains that Morgan and Garcetti do appear to be corrupt and a sting operation is arranged in which the FBI will surveil the big drug deal with Pooh-Bear and attempt to catch Morgan and Garcetti in the act of robbery at the buy location. One FBI officer is very suspicious of Tom/Danny and expresses his doubts, but the sting is arranged nevertheless.
Danny meets with Jimmy to discuss the deal, revealing that he is not Danny, is a 'rat' working with the police, and that a special role for Jimmy in the deal is required. Jimmy is crushed by the news and Danny's apparent lack of trust but agrees to do whatever Danny requests and oddly, in an emotional scene, shows Danny a tattoo he has had put on his shoulder, that shows Danny's face.
On the day of the deal, Danny is driving Jimmy's car, followed by FBI agents in another vehicle. Danny stops for cigarettes at a corner store on the way to the suburban Tropic Motel where the meth is to be purchased. At the same time, Morgan and Garcetti in a jeep are approaching Pooh-Bear's ranch in the desert, not the motel. In the motel room, Bubba approaches a figure sitting on the bed that appears to be Danny, but finds it is instead Jimmy the Finn in disguise. Jimmy explains to Bubba that Danny is sorry and going to take care of things by himself. Bubba is not happy.
Meanwhile, at Pooh-Bear's desert residence, Morgan and Garcetti are staked out and Danny arrives with the cash on a chopper-style motorcycle. Danny is frisked for weapons as he enters and finds Pooh-Bear and three other thugs assembled at the kitchen table playing cards. Danny manages to take a seat and prepares to recover his .357 magnum handgun that he previously taped to the underside of the table as Pooh-Bear examines the cash and calls to Big Bill. Danny sees Big Bill's reflection and realizing he is about to be shot in the head, ducks under the table and with the .357 shoots Big Bill and two of the other men fatally. Big Bill's first and only shot misses Danny and kills the thug sitting behind him. Pooh-Bear is initially not hit but accidentally shoots himself in the leg before recovering somewhat and shooting Danny four or five times in the chest. Danny falls to the floor unconscious.
Morgan and Garcetti stealthily enter the ranch house, masked as they were at the scene of Liz's murder. Wounded, Pooh-Bear makes his way to his personal stash of meth or perhaps heroin in the next room and prepares to inject himself to relieve his pain, but before he can do this is executed by Garcetti with a shot to the head. The loaded syringe falls to the floor. Morgan sees Danny lying in a pool of blood on the floor among the corpses, makes an expression of dismay, then joins Garcetti in the other room. Both remove their masks.
Danny has not been severely injured by Pooh-Bear's bullets as he is wearing his vest, but he wakes up hurting badly, recovers his .357 and begins to drag himself toward the other room to confront Morgan and Garcetti. The scene flips to a flashback of the death of Liz in the Salton Sea house, Tom dragging himself from the bathroom to her side as blood drips steadily from her head wound into a large pool on the floor (recalling the beer incident at the tweaker house party). Before she dies she and Tom make a final brief connection and she seems to murmur: 'It's OK'.
Danny makes it to the room at Pooh-Bear's place and shoots Garcetti fatally, then shoots Morgan in the shoulder and confronts him about Liz's murder. Morgan acknowledges that he killed Liz. Now in a blind rage, Danny shoots Morgan in the knee and berating him for killing Liz, demands to know what he would do if he were him. Danny begins to lose it as he recalls his wife's death and looks away. In agony but recovering somewhat Morgan pulls a blade and cuts Danny with it, getting the .357 magnum and pointing it at Danny's head. As Danny looks into the barrel of the gun, he remembers firing eight shots with it but cannot remember whether its capacity is eight or nine rounds. Morgan taunts Danny and pulls the trigger but the hammer hits a spent case so the gun does not fire. At the same moment Danny notices the loaded syringe and grabbing it, injects Morgan in the jugular vein with its contents. Morgan falls incapacitated and Danny picks up Pooh-Bear's gun, looking at Morgan convulsing on the floor. Danny's inconsolable grief and feeling of fulfillment of his quest are apparent and he puts the gun to his own head to commit suicide, but after a few seconds he changes his mind and shoots Morgan multiple times in the chest.
Next, the scene is back at Danny's apartment, where he has returned and dressed in a suit is doing his 'My name is Tom Van Allen. I'm a trumpet player.' ritual yet again. Unfortunately Quincy has broken in and shoots Tom-Danny once in the abdomen with a silenced semi-automatic handgun. Quincy has beaten Collette into revealing her relationship with Danny, and that he is a 'rat' working with the police. Collete apologizes and is dragged from the room by Quincy. The apartment begins to burn and we arrive at the same scene as in the opening moments of the film - Tom Van Allen gut shot and about to burn to death amidst the cash and wreckage. Tom's fate appears to be sealed as, surrounded by flames, he plays the moody piece 'Saeta' from the Salton Sea.
However - miraculously, Tom is lifted from the fiery scene and lying on a moving gurney in a hospital corridor comes to and sees the image of his face tattooed on Jimmy the Finn's arm, then Jimmy smiling as Tom goes into surgery.
Finally, we see a physically fully recovered Tom Van Allen walking out of LA and then returning to the fateful spot at the Salton Sea beach - where he throws his trumpet into the murky waters below the barren tree. Tom in voice over affirms his redemption: he has at last escaped his past and is embarking optimistically on a new life. The film closes with the haunting song 'Mourning' by the band 'Tantric'.