With Lionsgate's seven-part "Saw" series having worn out its welcome and wearied moviegoers, Paramount's "Paranormal Activity" films have swept right in to replace it as Halloween's go-to horror franchise, a new entry appearing each successive October. Whereas the "Saw" movies were riddled in blood and guts and torturous acts of violence, "Paranormal Activity" relies on a more psychological creep factor, the power of drawn-out suspense and the sheer anticipation of something eventually popping into the frame enough to give anyone a stern case of the heebie-jeebies. Made for thousands rather than millions of dollars and relying on the power of social media sites and word-of-mouth to create buzz, 2009's supernatural found-footage chiller "Paranormal Activity" earned over $107-million domestically. Hot on its heels (and arguably even more effective) was 2010's slyly set-up prequel "Paranormal Activity 2," making over $84-million at the box office. Another year later, directors Henry Joost and Ariel Schulman (2010's "Catfish") and returning screenwriter Christopher Landon (2007's "Disturbia") spin further back into the past to depict how the demonic haunting of two doomed sisters began. Judged wholly on its own merits, "Paranormal Activity 3" one-ups both of the previous films in quality and quantity of its scares. Returning fans will get what they came for, and then some. As a connective piece of the puzzle, however, it doesn't begin to add up to what has been established, calling into question the memories—and even the authentic identities—of the grown-up Katie (Katie Featherston) and Kristi (Sprague Grayden).

The year is 1988, and 8-year-old Katie (Chloe Csengery) and 5-year-old Kristi (Jessica Tyler Brown) live with mother Julie (Lauren Bittner) and her wedding videographer boyfriend Dennis (Chris Smith) in a spacious upper-middle-class suburban home in Santa Rosa, CA. When an earthquake caught on camera reveals dust falling from the ceiling and settling on an invisible figure before dropping to the floor, Dennis is understandably perplexed and intrigued. Setting up two camcorders upstairs (one in each bedroom) and another one jerry-rigged to an oscillating fan downstairs, he begins to record the alarming goings-on as they rapidly escalate. Julie is skeptical, mostly because nothing overt has happened to her yet, but Kristi, who claims to have begun talking to an old man in the house named Toby, knows all too well that a supernatural presence is among them.

Stylistically, "Paranormal Activity 3" is more of the same, inventing a plausible explanation for why these characters' lives are once more being captured on tape. Within this framework, directors Henry Joost and Ariel Schulman display a fantastically inspired sense of showmanship, ratcheting tension to a heightened, breathless level and coming up with a real humdinger of a new filmmaking scheme with the introduction of the fan-mounted camera. As it swivels ever so slowly back and forth, the audience shrinks in their seats, giddy yet anxious of what might be revealed in the living room and kitchen. There are at least three huge scares conceived from this expert gimmick, one involving a mysterious figure under a white sheet stalking babysitter Lisa (Johanna Braddy) that is nothing if not a loving homage to 1978's John Carpenter classic "Halloween." If you're going to borrow from other movies, you might as well borrow from the best. The use of a Teddy Ruxpin doll (a fixture of 1980s kids' toys), a storage area in the girls' bedroom, and a Bloody Mary game involving Katie and Dennis' assistant Randy (Dustin Ingram) that goes malevolently awry all add to the mischievously nerve-rattling fun.

When things get too tense at home, the family members find themselves taking shelter at the cozy country cottage of Katie's and Kristi's grandmother (Hallie Foote). They think they're safe, but what follows alerts them to the contrary. One particular extended climactic shot is an astounding, willies-inducing showstopper, with Dennis' search for the rest of the family through the darkened rooms of the house turned into a first-person nightmare of the shadowy unknown and things—not all of them otherworldly—that go bump during the witching hour. As satisfying as this finale is, it does open itself up for one legitimate problem: what occurs does not match up with what Katie and Kristi, as adults, have described of their childhoods in the first two movies. Where is the house fire, or the dark figure that supposedly always appeared at the foot of Katie's bed? Furthermore, watching the final theatrical trailer afterwards reveals that many of these story holes were filmed and just cut from the finished product. It's the one disappointment in an otherwise exceptionally well-made movie, the ending practically demanding that a fourth picture fill in these gaps and continue the sordid tale of these sisters in 1988.

Faultlessly and naturalistically acted by its mostly unknown cast—Lauren Bittner (2009's "Bride Wars") is particularly arresting as mother Julie, kept out of the loop for too long about what is occurring around her—"Paranormal Activity 3" is a fitting continuation to a series that keeps raising the stakes and getting better without needing to resort to unnecessary gore and extreme violence to freak out the viewer. Beyond that, it adds to the lore of Katie's and Kristi's hauntings even when posing more questions than answers. The ambiguity is what adds to one's fear. As All Hallows' Eve approaches, "Paranormal Activity 3" is the ideal moviegoing choice for anyone yearning to get into the holiday spirit.