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The movie begins with Hank Mitchell (Bill Paxton) giving a monologue about how he once was a very happy man. We see him as a simple accountant at Delano's Feed Store, his wife Sarah (Bridgette Fonda) as a humble librarian. Coming home early on New Years Eve, he greets his very pregnant wife, changes into good clothes, and heads off to the cemetary with his older-and mentally challenged-brother Jacob (Billy Bob Thornton), Jacob's friend and town drunk Lou (Brent Briscoe), and a potted poinsettia.
On the way back from the cemetary, they narrowly miss running over a fox, and ram into a tree. Jacob's dog, Mary Beth, runs off after the fox, and the trio set off looking for the dog. This is where we see the first indications of Lou and Jacob making fun of Hank. Lou tosses a snowball at Hank, misses, and reveals a crashed airplane. Hank crawls in, thinking the pilot might still be alive. But the head-bobbing he sees is nothing more than crows picking out his eyes. The crows fly straight at him, cutting Hank above the right eyebrow, before they fly out the door that Jacob conveniently opened. Lou pulls a sack off of Hank, and Jacob pulls Hank out. Then Lou makes his announcement.
The gymbag is full of money, and they begin to debate over whether or not they should keep it, who should keep it, etcetera. They count the money, and just then Carl Jenkins (Chelcie Ross), the town sherriff, happens to drive by. Hank tries to get rid of him, and just then Jacob, at Lou's suggestion, comes strolling up, asking the sheriff if he had heard a plane. After Carl leaves, Hank reprimands them both for not being careful.
After Lou is dropped off, and pelted with snowballs by his wife for being late, Hank goes home and tells Sarah. They debate over keeping the money, but finally decide on it. Sarah tells Hank he has to return 500,000 of the 4.4 million, so as to throw off suspicion, but not to tell Jacob.
Hank brings Jacob with him to the site again,
saying he moved the body and had to put it back the way it was. He
leaves Jacob at the car, pretending to change a flat tire. Hank goes
about his business, but at the same time old man Stevenson comes by on his
snowmobile, chasing that same fox. Jacob gets nervous answering the
old man's questions, and knocks him clean out.
Thinking he's dead, they decide to drive him off
the bridge into the creek. But just as Hank is driving along in Stevenson's
snowmobile, the old man comes to, and they both fall off the snowmobile.
Stevenson asks Hank to get the police, and Hank smothers him. After
he meets up with Jacob, Jacob wants to confess, not being able to live with
the guilt of killing a man. Hank
tells him that it was he who smothered Stevenson, and they drive
off.
One day, as Hank is arguing with an angry farmer about being overcharged (played by his dad, John Paxton), Jacob calls him and asks him to meet him at the abandoned farm where they grew up. He tells Hank that he wants to buy back the farm, and Hank tries to discourage him, saying that they have to leave once they are sure the money is not marked, that staying will draw suspicion, and how can Jacob think he can run a farm when he does not know half as much as their father did, and their father still lost the farm. Jacob reveals that the farm went under not solely from mismanagement, but from the tuition bills for Hank's education, and that if not for that, the farm would have been his. he then gives a monologue about how this life, this town, is all he knows, and he doesn't want to leave it.
In the middle of the night, Lou comes banging on the door drunk, demanding his money. When Hank refuses, Lou insinuates that he knows how Stevenson died. Realizing his brother had told Lou and that he was now being blackmailed, he gives Lou forty dollars, and agrees to split up the money. And wouldn't you know it, no sooner are the words spoken and Lou's out the door, Sarah appears at the top of the stairs, indicating that she's in labor.
At the hospital, Jacob comes to visit, bringing baby Amanda his old teddy bear. Hank confronts Jacob about telling Lou, and asks him who's side is he on. This reveals that Lou has also been asking the same of Jacob, and Hank makes him choose. Jacob says he chooses his brother, and hands him the bear.
Hank tells Sarah about Lou, and Sarah says that they have to tape Lou confessing to the murder of Stevenson. Hank objects to its practicallity, but Sarah insists it will work if they get him drunk and make him pantomine, and if Jacob will help.
Hank goes to Jacob with this plan, and Jacob objects to having to trap his friend, until Hank promises to help Jacob get the farm back. He invites him to dinner, where Jacob reveals how their parents killed themselved because they were in so much debt. Hank, not wanting to believe at first, finds a certain logic in Jacob's analysis of the facts behind their "accident."
They take Lou out for drinks, then back to his house when he's had too much to drink some more. His wife complains at the noise, but they continue. That's when they start making fun of how Hank drinks whiskey. Jacob then starts to say the they should never have let Hank keep the money, and starts to pantomine him, much to his dismay.
As Hank gets up to leave, Jacob then suggests that Lou have a crack at making fun of Hank--say pretending to be Hank confessing to Stevenson's murder. Realizing that it was all a ruse, Hank sits back down, turns on the tape recorder, and Lou, unawares, confesses.
Furious at being betrayed by both Hank and Jacob, Lou grabs his shotgun and exclaims that he's going to kill Hank. They try to calm him down, but he fires a warning shot into the air. Jacob ran out to the car, got his shotgun, and pleaded with Lou to calm down. Ready and willing to shoot Hank, Jacob has no alternative but to blow him away.
Lou's wife, Nancy, awakened by the gunshot, saw it, and when Hank tries to explain that it was self-defense, she won't stop screaming that they did it for the money. Hank picks up Lou's shotgun, and Nancy, paranoid, starts to back away and runs into the kitchen.
Hank proclaims that he won't shoot her, but when he turns on the lights to the kitchen, she starts firing a pistol at him. Hank then blows her away. He then starts to shoot up the house, making it look like Lou and Nancy were fighting, and that Lou killed her. He then calls the police frantic. Afterwards, he finds Jacob in the basement, and he tells him what to tell the cops. He implores him to work on getting their story straight.
At the police station, Hank is being interrogated, and calmly gets talks his way around the holes in his brother's version of the story. It is unclear whether or not Carl believes him, but he lets him go. Later that night Carl comes by the house. Suspecting the worst, Hank holds his breath while Carl tells him he found Jacob drunk in the house where the double murder took place, and was wondering if he could drop him off with Hank. Hank, relieved, accepts him graciously.
It's not long after that that Carl calls the brothers into the police station to talk to an FBI agent about the missing plane. The agent tells them that the money was from an armoured car robbery, and he invites them to come scouting for it.
Sarah suspects that he is not telling the truth, partly because he did not show Hank his FBI badge, partly because the bills were of all one denomination (an armoured car would carry many denominations), but mostly because of the articles that she had found at the library. Shortly after Hank told her of the kidnapping, she did some research and came up with the kidnapping of a woman for 4.4 million dollars. She suspects that the alleged FBI agent is actually the brother of the man who took off with the entire ransom. Seeing as how he disagreed with her, she made a deal with him--if she calls the FBI asking for the agent, and they've never heard of him, then he won't go.
The next day Hank goes in to meet Carl, and asks him if the agent showed him his badge. Carl jokes, but answers no. Carl does ask about the missing Jacob, and Hank says he's hungover and can't make it. Just as they're all about to leave, though, he makes a call to Sarah, and she confirms her suspicions--there's no such agent, and Hank is in serious danger if he goes. Hank, ignoring Sarah's pleas, goes anyway.
Before he leaves, Hank takes one of Carl's guns, and an assortment of bullets. They get to the crash site, separate, and start looking around. They agree to fire off a shot in the air when someone finds the plane. Carl and the agent finds the plane first, and Carl fires off the shot. Hank runs frantically, trying to warn Carl, but to no avail. The agent fires at Carl, killing him instantly.
He forces Hank into the plane to retrieve the money. Hank goes in and brings out the trash bag. He inspects it, but finds only 500,000 dollars and Hank pointing a gun at his head. Figuring that Hank had taken a piece himself, he jibes that they both have some explaining to do until Hank shoots him dead.
Jacob arrives, and sees what happened. Again, Hank tries to get them to corroborate their stories, but this time Jacob refuses. He says he's tired of the lies, and wants Hank to shoot him and make it look like the kidnapper did it. Hank pleads for Jacob to change his mind, but he says that if Hank won't, he will blow his own brains out. So in the middle of his monologue Hank shoots him in the back, and then falls to his knees weeping.
The sherriffs office again questions him. A disgusted Hank goes home to Sarah, and starts to burn all the money. Sarah begs for him to stop, that they can go to South America, but he won't hear it. So they are now destined to live a life as feed store accountant and librarian, only no where near as happily as they did before they found the money.