Thirteen hours after the initial T-virus outbreak in The Hive, the Umbrella Corporation sends in a research team to re-open the complex. The team is slaughtered by zombies and Lickers. Since the Hive's entrance is not sealed, Umbrella establishes a security perimeter around Raccoon City and also evacuates the Umbrella scientists in the Raccoon City.
After surviving The Hive, Alice was recovered by Umbrella and experimented on. She now has superhuman strength, speed and agility. Waking up in an empty hospital, she wanders outside to find the virus has escaped and the city is a ghost town. She arms herself with a shotgun from a police car and starts walking. Meanwhile, she is disturbed by a man who keeps showing up in her visions, and who was experimenting on her.
While Umbrella is evacuating civilians at the last open bridge, police officer Jill Valentine (Sienna Guillory) confers with Sergeant Peyton Welles. The T-virus begins to affect citizens at the checkpoint, and Peyton is bitten. Umbrella supervisor Timothy Cain (Thomas Kretschmann) seals the exit and orders his soldiers to fire over the crowd's heads, scaring them back into the city. Elsewhere, Carlos Olivera (Oded Fehr) and other Umbrella soldiers link up with Special Tactics And Rescue Squad (STARS) units to defend against an onslaught of zombies in the city. Their positions were overrun by zombies, causing Carlos and his team to retreat with a bitten Yuri, who turns into a zombie and infects Carlos before being killed. Jill, Peyton and a news reporter named Terri Morales (Sandrine Holt) lock themselves in a church, which turns out to be full of Lickers; they are saved at the last minute by the heavily armed Alice.
Umbrella dispatches their Nemesis program to kill all remaining STARS operatives, and plan to sanitize Raccoon City using a nuclear weapon. When Nemesis encounters L.J. (Mike Epps) a surviving citizen, and members of STARS, they open fire. He guns the STARS down but spares L.J.'s life when he drops his weapons. Dr. Charles Ashford (Jared Harris), an Umbrella scientist and creator of the T-virus, has refused extraction until he has located and rescued his daughter Angela (Sophie Vavasseur), and soon figures out she is hiding out in her school dormitory. He contacts Alice and the other survivors through the public telephone system, and offers to arrange their evacuation in exchange for rescuing Angela. Alice is separated from the group when Nemesis appears and kills Peyton. Jill and Terri make it to the school, picking up L.J. on the way, and encounter Carlos and Nicholai, acting on the same offer. After encounters with zombie dogs and infected children who kill Nicholai and Terri, Alice saves the group again and they find Angela in the school. She reveals that she was injected with T-virus; Dr. Ashford created the T-virus to remedy her illness, but he also created the anti-virus because of the T-virus's potential for mutations. Alice reveals she was injected as well. She injects Carlos with the anti-virus to save him.
Dr. Ashford gives Alice the location of the extraction point at the City Hall, where the helicopter waits, but after he talks with her he is confronted by Major Cain. The group makes it to the point, but are cornered by Major Cain, who has caught wind of Dr. Ashford's intentions and is also holding him prisoner. All but Alice are restrained, and seconds later Nemesis appears. Major Cain commands Alice to fight Nemesis. Alice refuses, until Dr. Ashford is shot. She relents and fights him, impaling him on a pole. Defeating Nemesis, she realizes he is Matt Addison.
Her stand rekindles a trace of Nemesis's former humanity and they join forces and attack the Umbrella forces. Nemesis is killed when he blasts an attacking helicopter and it crashes on him. They escape in the helicopter. Alice throws Major Cain out of the helicopter. He shoots a few infected people, but ultimately is overcome. The nuclear missile detonates over the center of Raccoon City, destroying it completely. Despite escaping the immediate area, the helicopter is caught in the blast wave and crashes. As the helicopter falls, a metal pole comes loose and is flung towards Angela. Alice moves in front of Angela and is impaled.
Some hours after the explosion, Umbrella employees locate the helicopter's crash site, deep in the Arklay Mountains. There, they find Alice's body, badly burned. The others are nowhere to be found. Umbrella employees take her body and leave the crash site, with the burned Raccoon City in the background. The media shows that Terri's footage has been shown to the press, saying that Umbrella released the zombies and the T-virus. Umbrella denies this, arguing that it is a hoax. Umbrella promotes a fake story about a nuclear power plant explosion near the city. The media announce that Jill and Carlos are wanted by the police for questioning.
Three weeks later, in the midwest Umbrella research facility, Alice awakens in a water tank. Led by Umbrella scientist Dr. Isaacs (Iain Glen), the doctors begin questioning her. At first, she appears to have no memory, but soon she recalls events from Raccoon City and before. She realizes that the doctor who appeared in her visions is Dr. Isaacs. She attacks him, and fights her way out of the facility. She makes her way outside only to be surrounded by more Umbrella guards holding her at gunpoint. Suddenly, Jill, Carlos, Angela, and L.J. pull up, disguised as Umbrella employees. Carlos shows the guards a written order placing her in his custody.
Alice enters the vehicle, and as they drive away, Angela asks her if she is alright. She doesn't respond, and Dr. Isaacs is shown saying, "Let them go," and then "Program Alice Activated." A close-up of her eye shows a flashing Umbrella logo.
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