Down-on-their-luck drifters Kearney and Martin wander into the small town of Cedar Creek looking to swindle a few pounds from the locals. After a not-too-friendly reception, the pair decide to move into an abandoned shack on the outskirts of town. They are soon joined in their new home by Joycie, another town outcast with a shady past. While the three manage to start a rather happy life together, they soon find that others in the town strongly disapprove of their living arrangements.
When Billy Peltzer is given a strange but adorable pet named Gizmo for Christmas, he inadvertently breaks the three important rules of caring for a Mogwai, and unleashes a horde of mischievous gremlins on a small town.
During shopping for Christmas, Frank and Molly run into each other. This fleeting short moment will start to change their lives, when they recognize each other months later in the train home and have a good time together.