Excerpt From an Article I Wrote: Spoiler Alert
It may seem a little bit unfair to expect a "happy ending" from a horror movie to begin with. After all, a common staple of the horror movie franchise is to throw an open ended shot to the slasher as he raises a hand, opens his eye suddenly, or does something to let everyone know that yeah, he was dead, but he got better.
Now, of all the films on this list, Darkness Falls was the one I wish I hadn't paid money to see. Granted, like 98% of it's intended demographic, I only went to see Emma Caufield. The other 2% were definitely interested in the Tooth Fairy. (I assume)
In the town of Darkness Falls, a kind and wealthy woman named Mathilda was accused of killing two children. In an episode of mob mentality that makes the LA riots look like a Macy's Thanksgiving Day Parade, poor Mathilda was burned to death in her home.
Now she stalks the ambiguously named town of Darkness Falls, killing anyone who sees her, but specifically targeting children who have lost their last baby teeth. Unfortunately this includes young Kyle Walsh. Walsh survives, but his mother is brutally killed in the bedroom down the hall. And because the gene pool in Darkness Falls is so shallow, the police fail to notice the fact that there is not a drop of blood on his pure white pajamas, nor signs of defensive wounds on his body, before assuming he's the one who killed her.
Years later, Mathilda returns to harrass Emma Caulfield's little brother and from then on hilarity ensues. Everyone but Kyle, Emma, and her little brother is killed off and the ghost Mathilda is temporarily defeated in a fiery climax at the top of an even more ambiguously placed light house.
Why Isn't this a Happy Ending?
Well, lets get the obvious aside. Mathilda isn't dead. As mentioned, we get one last scene at another little boy's house that the poor old spinster has moved on to harrass.
Now, lets look at the situation. Kyle Walsh has returned to Darkness Falls to help his girlfriend's little brother, who has become the target of Mathilda's, ahem, affections. Everyone in this backwater hick town still believes he killed his mother. Everyone who was seen with him last, except for Emma and little Michael has been killed by this ghost.
And the last place Michael and Emma were seen was at the hospital, where Michael was being treated for his irrational fear of the dark. Translate, his perfectly rational fear of being torn apart like a wet paper bag full of minced sausages, that no one else believes. So add that to the fact that no one the town finds credible believes in Mathilda Thompson.
Walsh is going to be a wanted fugitive at worse. At best, he'll be sharing a brightly lit padded room with Liev Schriber and the two of them will meet Cole's mom Lynn in the dining area of the mental hospital the three of them will be staying at.