Valerie lives with her parents, Cesaire and Suzette, and older sister Lucie in Daggerhorn, a village on the edge of a forest plagued by a
Wolf that is also a
werewolf. She is in love with her childhood friend Peter, a local woodcutter, but her parents arrange for her to marry Henry, son of the wealthy
blacksmith Adrien Lazar. Valerie and Peter plan to elope, only to learn the Wolf has broken its truce not to prey on the townspeople and murdered Lucie. The preacher Father Auguste calls upon the famous witch hunter Father Solomon for help, but the townspeople decide to venture into the Wolf's lair to kill it. As the village celebrates, Father Solomon declares that the slain animal is a common
grey wolf, as the true werewolf would have reverted to human form. Father Solomon's men isolate Daggerhorn and investigate the villagers to uncover the Wolf's identity. That night, the Wolf attacks, and the townspeople shelter in the church while Valerie and her friend Roxanne search for Roxanne's developmentally disabled brother, Claude. When the two become cornered by the Wolf, Valerie discovers she can understand him, who threatens to kill Roxanne and destroy the village if Valerie does not leave with him. It escapes, vowing to return for her decision. The next day, Claude is captured and killed by Father Solomon's men, who confuse his agitated state for supposedly practicing
black magic. Roxanne reveals that Valerie is able to communicate with the Wolf. Believing Valerie is also a witch, Father Solomon displays her in the town square to lure out the Wolf. Henry and Peter help Valerie escape. Henry brings her to the church, where the Wolf bites off Father Solomon's hand with silver-coated fingernails. The villagers shield Valerie from the Wolf, who is again forced to flee after burning his right paw on the church's holy ground. Since Father Solomon has been bitten by the Wolf, the Captain promptly kills him. Valerie dreams that the Wolf is her grandmother, so rushes to her nearby cabin. There she finds her dead and discovers that her father Cesaire is actually the Wolf. He reveals the curse was passed to him by his own father and he intended to leave the village with his children. Cesaire killed Lucie upon finding she could not understand him in wolf form and realizing Suzette had conceived her through an affair with Adrien. He asks Valerie to accept the curse, but she refuses. Peter arrives and Cesaire bites him and throws him aside, but Peter throws an axe into Cesaire's back, allowing Valerie to kill him. They fill Cesaire's body with rocks and dump him in the lake in order to protect the secret from the villagers. Peter departs, vowing to return when he has learned to control the curse, and Valerie vows to wait for him. In the next few years, Daggerhorn returns to normal, despite Cesaire's death. The people continue to sacrifice livestock to the werewolf, fearful of its return and not knowing it has been killed. Suzette accepts Cesaire is never coming back, though she remains unaware that Valerie killed him. Henry becomes the next witch hunter, succeeding Father Solomon and becoming a highly honorable man. Valerie chooses to live in her grandmother's home in the forest on her own, having become disillusioned with living in Daggerhorn. Finally, one night, she hears something in the woods outside her house. She is then greeted by Peter, transformed into a werewolf and in full control of his abilities, when he returns to be with her. In the ending of the alternate cut, when Valerie sees Peter upon his return, she is holding their baby. ==Cast==