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Christmas Eve, 1899. Edward Newgate arrives at Stonehearst Mental Asylum to begin his apprenticeship. Dr. Lamb takes Edward on a tour, proudly introducing his staff and patients, including Eliza Graves - a hauntingly beautiful woman whose violent aversion to intimacy has ensured her permanent residence there. As the days pass, Edward observes Lamb's modern methods. The "medieval" practices so favored by his predecessor, Dr. Salt, have been abolished, and his patients are never sedated, segregated or locked up. Lamb's vision is to build an enlightened society within the walls of his establishment, where the patients are respected and mingle with the staff as equals. One night Edward hears a strange thumping noise coming from the vent in his sleeping quarters. Intrigued, he follows the sound down into the cellar and discovers Dr. Salt, locked behind bars with Matron Pike and their orderlies. As Dr. Salt tells of Lamb's deadly past, Edward realizes the lunatics have taken over the asylum.