Set in the fictional town of Dante's Peak, Washington, located in the northern Cascade Mountains, the film is somewhat based on the real-life eruptions of Mount St. Helens in 1980 and Mount Pinatubo in 1991. The film begins with the eruption of an unnamed volcano in Colombia during which volcanologist Dr. Harry Dalton’s (Brosnan) fiancée (Walker Brandt) is killed as the couple tries to evacuate.
Four years later, Harry is tasked with investigating possible volcanic activity in the Northern Cascades near the town of Dante's Peak. Later, two backpackers (David Lipper & Heather Stephens) are skinny dipping in a hot spring when the water begins to boil, killing the couple. In Dante's Peak, the town is receiving an award for being "The second most desirable place to live in the United States, population under 20,000" and celebrating its annual "Pioneer Days Festival". Harry meets with mayor Rachel Wando (Hamilton) who, along with her children, Graham (Foley) and Lauren (Smith), accompanies Harry to the mountain's "high lake" to check the water’s acidity. After checking the acidity and picking up the mayor's ex-mother in law, Ruth (Hoffman), the five of them head to the town's hot springs where they discover the bodies of the two dead backpackers.
Harry calls a town meeting to discuss putting the town on alert during which Dalton's boss, Dr. Paul Dreyfus (Charles Hallahan), decides against the alert. Despite strongly opposing the decision, Harry remains in the town to help Dreyfus and his USGS crew Greg, Terry, Nancy, and Stan (Heslov, Trutner, Field, and Ma) evaluate the mountain. After the town's water supply becomes sulphuric due to the acidity of the mountain breaching the town's springs, Harry and Dreyfus decide to evacuate the town.
During the town meeting alerting the citizens to evacuate, the eruption begins, causing a stampede. Earthquakes begin destroying the town and the main bridge leading out of town collapses, causing chaos.
Meanwhile, the mayor's children steal her car and drive it up the mountain to Ruth’s cabin in hopes of evacuating her. As the eruption continues, the USGS crew prepares to leave while Harry and Rachel head up the mountain after the children, to find Ruth refusing to leave. Down in the town, the mountain has expelled large amounts of ash and most residents have escaped.
As Harry and Rachel argue with Ruth for her to come with them, a lava flow engulfs all three cars and parts of the house. The five of them flee to the nearby lake and take a metal boat across the river. It becomes apparent that the lake has turned to sulphuric acid and is eating through the metal boat. As they near the shore the boat's motor fails. Ruth, realizing that the boat will not make it, jumps out to pull it along to the pier before it sinks. She wades through the acidic water screaming, but dragging the boat along to try and save the rest of them. After they reach the shore the five of them head down the mountain towards the town.
As the USGS crew is evacuated by the military a USGS vehicle, driven by Dreyfus, is washed away when a bridge fails. Further up the mountain, Ruth and Rachel reconcile before Ruth dies from her injuries. At a ranger station, Harry hot wires a truck and drives the family down the mountain. When they arrive at the USGS operations center in the town, Harry realizes that the mountain is about to experience a catastrophic eruption. As he leaves, he picks up a tracking device on loan from NASA.
Back to the truck, he heads towards the town's mines as Dante's Peak finally explodes and a giant pyroclastic cloud engulfs the town. The truck makes it safely into the mine but the town is destroyed, leading the USGS crew to believe Harry has been killed. (One piece of film footage from this sequence is apparently so realistic that it has made it's way into more than one documentary about actual volcanic eruptions.) Inside the mine, Graham leads the way, as most of the abandoned mines served as a hideout for him and his friends, and shows the survivors all of his supplies. Remembering that he left the tracking device in the truck, Harry leaves to activate it. While in the truck, Harry is injured and trapped by falling rocks and has to reach the tracking device without causing a fatal cave-in. Eventually he reaches it and activates it. The device flashes for "one or two days" before the four are rescued from the mine.
After being rescued from the mine, Harry meets the rest of his crew, who tells him that Dreyfus didn't make it. On board a helicopter, Graham asks Harry if he really meant what he said in the mine about taking the family fishing and Harry confirms it with the words, "Sure did." He and Rachel clasp hands and kiss and Harry tells the helicopter pilot that they are ready to go, and they fly off.
Meanwhile, as the credits begin rolling, the camera pans across the ruins of the town before finally resting on the Dante's Peak volcano, now reduced to a menacing Mt. St. Helens-like horseshoe-shaped caldera, as the sun rises beside it.
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