American Psycho 2 opens with a flashback to a seminal moment in the life of the film’s protagonist Rachael Newman. When Rachael was twelve, her babysitter brought her on a date with serial killer Patrick Bateman. As Bateman began to torture the babysitter, Rachael broke free of her bonds, snuck up on Bateman and stabbed him with an ice pick, killing him. Thus begins the murderous path of Rachael Newman.
The film then skips forward to the present day, focusing on Rachael’s college experience. Inspired by her encounter with Bateman, Rachael has taken an interest in criminology. Her goal is to become the teaching assistant of former FBI agent Professor Starkman. Rachael believes that if she obtains this prestigious position she will be a shoe-in for the FBI’s training program.
Given the prestige of Starkman’s teaching assistant position, Rachael faces stiff competition. Being the titular psycho, Rachael decides to murder any classmates whom she views as competition. During her murderous rampage Rachael decides to see school psychiatrist Dr Eric Daniels. Diagnosing Rachael as a textbook sociopath, Dr Daniels decides to warn Starkman of the potential danger. Due to a case of mistaken identity Starkman believes that his student, and object of an extramarital affair, Cassandra Blaire is the sociopath of who Dr Daniels warned.
In a trite coincidence, Cassandra is also the roommate and friend of Rachael. When Cassandra reveals to Rachael that she is having an affair with Starkman, Rachael murders Cassandra to eliminate yet another potential rival. Rachael arranges for Starkman to find Cassandra’s body. A distraught Starkman calls Dr Daniels and tells him that Cassandra is dead. As the result of this call Dr Daniels wrongfully assumes that Rachael is dead and her sociopathic danger is over.
In a fit of grief Starkman decides to leave his teaching position. Rachael, realizing that without Starkman she will be unable to enter the FBI’s training program, decides to seduce Starkman to get the teaching assistant position.
At this point in the film Rachael reveals that she is not who she seems to be. At the beginning of the school year “Rachael” killed criminology student Rachael Newman and assumed her identity.
Starkman, who has been drowning his sorrows with alcohol and Valium, is confronted by Rachael. Rachael confesses that despite Starkman’s affairs with numerous women (including young Rachael’s babysitter, who after learning of Bateman from Starkman decided to track down the serial killer), she still loves him. Seeing that Rachael is wearing the clothing and jewellery of the deceased Cassandra Starkman backs away from Rachael and falls to his death out of an open window.
As Rachael leaves the scene of the crime she murders a janitor who witnessed Starkman’s death. Driving away from campus with the freshly deceased Starkman in the passenger seat of her car, Rachael is pulled over by a police officer who she then murders with an ice pick.
As the film reaches its climax Dr Daniels and two police officers pursue Rachael in a high-speed car chase. Rachael loses control of her car, driving it over a cliff where it bursts into flames. Dr Daniels and the police officers witness the explosion and assume that Rachael has perished.
Inspired by his encounter with Rachael, Dr Daniel writes a popular book about her killing spree. After delivering a talk about his book, Dr Daniels sees a chilling sight – Rachael. Not only did Rachael survive the explosion, she also murdered Starkman’s previous assistant, Elizabeth McGuire, and has assumed her identity. Rachael has finally obtained her goal and is now a student in Quantico.
She approached Dr Daniels and lets him know that there is no point in committing the perfect crime if no one knows about it. The body recovered in the explosion was the real Rachael Newman, therefore, “Rachael” cannot be linked to any of the murders.
“Rachael” then walks out of class self-satisfied in the knowledge than Patrick Bateman is not the only American psycho; she is an American psycho too.