Based on a true story: Norwegian winter, 1915. On the island Bastøy, outside Oslo, a group of young boys aged 11 to 18, are held in an institution for delinquent youth, notorious for its sadistic regime. One day a new boy, Erling, arrives, determined to escape from the island. After a tragic incident, he ends up leading the boys in a violent uprising. When the boys manage to take over the island, 150 soldiers are sent in to restore order.
A barren soundstage is stylishly utilized to create a minimalist small-town setting in which a mysterious woman named Grace hides from the criminals who pursue her. The town is two-faced and offers to harbor Grace as long as she can make it worth their effort, so Grace works hard under the employ of various townspeople to win their favor. Tensions flare, however, and Grace's status as a helpless outsider provokes vicious contempt and abuse from the citizens of Dogville.
An outlaw named Guerrero Hernandez is shot in the back and killed whilst attempting to free his half-brother from a small-town prison. Making a deal with the devil, Hernandez returns from the dead to take his revenge.