Linoge is imprisoned in the town's holding cell by part-time constable Michael Anderson (Timothy Daly), but it becomes clear that his ability to affect the town for ill is not inhibited as he sows supernatural terror in the town's populace through strange suicides and terrifying dreams. After escaping from the cell, Linoge's campaign of terror culminates in an enchantment that places all eight of the town's small children into unconsciousness. It's only then that Linoge reveals the reason why he has come into their town.
What Linoge desires is an heir, one of the eight children he has enchanted. He reveals his true form (an impossibly ancient, dying man), explains that he is not immortal, and needs someone to carry on his "work" once he can no longer do it himself. He states that "in matters such as this" he can not simply take the child he desires, but he can punish. If the town refuses his request, he threatens to force them to march into the sea two-by-two, as he claims to have done at Roanoke, Virginia centuries before. With that, he leaves them with one hour to make their decision.
Although Michael Anderson begs the town to refuse Linoge's request, appealing to their common decency, his arguments fall on deaf ears. All of the townspeople except him vote to give Linoge what he desires. Linoge is deeply pleased at this choice, and has each parent draw one of eight "weirding stones" from a sack. The parent who draws the single black stone is the parent whose child will be taken, and that child turns out to be Ralph Anderson, the young son of Mike and Molly Anderson, and the child hinted to be favored by Linoge throughout the series. With a contemptuous thank you to the town, and a remark to Mike Anderson that Ralph will eventually come to call him "father", Linoge flies off into the night with his prodigy.
Most of the film's epilogue is narrated by Mike Anderson, as he explains how he leaves Little Tall and his wife behind along with the town's secret. He ultimately ends up as a Federal Marshal working in San Francisco, where he attempts to move on from the storm. Other Little Tall townsfolk are not so lucky, with several committing suicide over the ensuing years. Molly ends up married to Alton Hatcher after Hatch's wife Melinda suddenly dies after a long period of depression. However, Linoge is not finished with Mike Anderson. Years after the storm, Mike is loading groceries into his car when an old man and a teenage boy walk by, humming Linoge's favorite tune ("I'm a little teapot". The boy looks strangely familiar to Mike, and he realizes that it is his son, now corrupted by Linoge. He chases after them into an alley, but they're gone.
Mike considers telling Molly about what he saw, but ultimately decides against it. His final thoughts are that sometimes, he thinks that was the wrong decision, "but in daylight, I know better."