"My father used to tell me that inside every person, there are two bears. One bear is all things good. Compassion, love, trust. The other is all things evil. Fear, shame, and self-destruction. I asked him, "Which one wins?" He answered, "The one you feed.""
Dani Moonstar is awaken by her father, William Lonestar, and rushed out of their Cheyenne reservation which is under attack by an unknown entity. As William leaves Dani to hide in a tree stump, he is killed and Dani runs and is knocked unconscious. She awakens in an abandoned hospital run by Dr. Cecilia Reyes who informs her that her entire reservation has been killed and that she is the sole survivor.
Eventually, Dani is introduced to four other young teenagers; Sam Guthrie, who can propel through the air, Illyana Rasputin, who can conjure magic and travel between another dimension called Limbo, Roberto da Costa, who can transform into a humanoid sun and lastly Rahne Sinclair who has lycanthropy. Through some group therapy, Dr. Reyes reveals that each of them are at this hospital because they have all suffered a tragedy. In Sam's case, he brought down a whole mine on his father and other coworkers, whereas Roberto burned his girlfriend, Rahne escaped her religiously strict village who branded her and Illyana was haunted by her past in child slavery as well as otherworldly beings called the Smiley Men.
Unfortunately, Dani immediately becomes antagonized by Illyana who insults and belittles her. After a failed attempt at escaping, Dani tries to jump from the church tower, but is stopped by Rahne who takes a romantic interest in her. In anger and frustration, Dani finally snaps at Illyana who retreats to her comfort, a small hand puppet of a purple dragon named Lockheed.
Eventually, the group come together when Illyana spikes Reyes' coffee with sleeping pills and they run amok on the grounds. They collectively believe that they are being trained to become X-Men, hence the strict supervision, as well as Reyes reminding them that they are considered dangerous and should not leave until they are under control. Dani and Rahne enter a romantic relationship with one another.
Reyes finally conducts an experiment on Dani and discovers that she can create illusions based on a person's psyche. As Dani goes under, she sees that Reyes has been conducting horrifying experiments on other mutant children. After the group finds Rahne severely injured, Illyana confronts Dani, knowing what her power is now. Reyes however prevents the two from fighting.
Instead, Dr. Reyes consults her employers who turn out to be Essex Corporation and they instruct her to kill Dani. As Reyes takes Dani away, Rahne immediately suspects that something is wrong. Dani uses her powers to learn of Reyes' true intent, but Rahne arrives in time and severely injures Reyes, forcing her to flee. The New Mutants regroup and realize that in order to escape, they have to kill Reyes. They find her and she reveals that she was training them to be killers for Essex, but that Dani must die due to her dangerous Mutant abilities.
Just as Reyes is about to kill Dani with her powers, the Demon Bear, a creature that had been stalking Dani and was the one who attacked her reservation, arrives and devours Reyes; destroying all the barriers. The gang carry an unconscious Dani away and Illyana summons her powers to jump between limbo and recruits a real life version of Lockheed to take on Demon Bear.
Sam, overcomes his anxiety while Roberto eventually overcomes his fear of burning others and they aid Illyana in fighting Demon Bear. Rahne attempts to speak to an unconscious Dani until she eventually goes to fight as well. Dani meets her father in the spirit world and he gives her the encouragement to fight back. She awakens and confronts the Demon Bear head on by talking down to it. She calms it and says that it can rest now; allowing it to dissipate.
As the sun rises, the New Mutants collect their belongings. Sam notices that the barrier is no longer around them and they all decide to head into town (Reyes had told them that the nearest town was twenty miles out). Not knowing if she was telling the truth, they all decide to head out together as a family; facing the unknown.
Empathic Illusion Casting - Dani has the mutant ability to generate and even manipulate powerfully realistic psychic illusions in the form of an individual's greatest fear or desire. By using her power, she is able to manifest the greatest fear of others in the form of near-reality shattering illusions, capable of inflicting both physical and mental damage on her targets. Although at first she had very little to almost no control over this ability and would subconsciously manifest these illusions to those around her, without her knowing. She later learned to control this ability, and use it at will.
Empathic Psi Powers - Dani can see into people's minds and affect their emotions; again, based on how much she can control.
