Silent Night, Deadly Night 3: Better Watch Out! (stylized onscreen as Silent Night, Deadly Night III: Better Watch Out!) is a 1989 American psychological slasher film written and directed by Monte Hellman. A direct-to-video release, the film is the second sequel to the 1984 film Silent Night, Deadly Night and centers around the Christmas-obsessed killer Ricky Caldwell awakening from a coma and stalking a blind teenager with psychic powers, while she travels to her grandmother's house for the Christmas holiday with her brother and his girlfriend. It was the last to follow the storyline set by the previous two films, the next two sequels being standalone entries.
After being shot down by police at the end of the previous film, the infamous Santa Claus Killer Richard "Ricky" Caldwell has been left comatose for six years, with a transparent dome affixed to his head by the doctors in order to repair his damaged skull. Wanting to contact Ricky, the eccentric Dr. Newbury begins using a blind clairvoyant girl named Laura Anderson to try to reach out to him. One Christmas Eve, after a particularly traumatic session with Newbury, Laura begins to regret her participation in his experiment, but Newbury tries to convince her to keep trying, saying that they can talk more after Laura returns home from visiting her grandmother over the holiday. After Laura is picked up from the hospital by her older brother Chris, a drunk hospital employee dressed as Santa Claus wanders into Ricky's room and begins taunting him, rousing Ricky back to consciousness. Killing the Santa impersonator, Ricky escapes from the hospital, taking a letter opener with him after killing a receptionist as well.
Picked up from a session with her psychiatrist, Laura is introduced by her brother to his new girlfriend, a flight attendant named Jerri, whom Laura dislikes. As the trio heads off to Granny's, they overlook Ricky (who can hear Laura thanks to their mental link) following them. Acquiring a truck and some fuel after murdering a motorist and a gas station attendant, Ricky makes it to Granny's first. Believing Ricky is simply an unfortunate vagrant, Granny tries befriending him but is killed when Ricky is provoked at the sight of a Christmas gift she offers him. Lieutenant Connely and Newbury find the two staff members butchered by Ricky at the hospital. They begin trying to track Ricky down, realizing he is drawn towards Laura after surveillance camera footage shows him uttering her name.
Reaching Granny's house, Laura feels something is wrong. Chris ignores her suspicions, who believes Granny may have just gone off for a walk. When Granny fails to show up and the car is found sabotaged, the group become very worried, with Chris and Jerri deciding to go out and look for Granny. Laura senses Ricky staring at her through the window and screams, bringing Chris and Jerri back to the house. After discovering the phone is dead and her picture is missing, Laura realizes it must be Ricky who is after her moments before Ricky punches through the door and begins throttling Jerri. She is saved when Chris stabs Ricky in the arm. Elsewhere, when Connely leaves the car to urinate, Newbury drives off, intending to try to reason with or trap Ricky, not wanting his experiment to go to waste by having Connely kill him.