At the end of 21st century, Earth is divided into two superpowers as the results from the devastation of a global chemical war: the United Federation of Britain and The Colony. With habitable space at a minimum, the UFB and the Colony struggle for supremacy. Citizens travel between the two nations via "The Fall", a supermassive gravity elevator which travels through the Earth's core. The UFB also faces terrorist attacks from a resistance movement.
Tired from his monotonous life in The Colony and spurred by his recurring violent nightmares, a factory worker Douglas Quaid (Colin Farrell) decides to visit Rekall, a company that implants artificial memories. Rekall employee McClane (John Cho) convinces Quaid to be implanted with memories of a secret agent. Quaid is tested to ensure compatibility but fails and McClane accuses Quaid of really being a spy. McClane and his co-workers are suddenly gunned down by a SWAT team. While Quaid is being arrested, he instinctively reacts and kills the officers before escaping.
Quaid returns home to his wife Lori (Kate Beckinsale) and confesses what has transpired. Lori attempts to kill Quaid, revealing that she is not really his wife of 7 years, but an undercover UFB agent monitoring him for the past 6 weeks. After a struggle, Quaid flees and manages to escape Lori and the police. Hammond (Dylan Scott Smith), a man claiming to be a former associate, contacts Quaid via a cell phone embedded in his hand, disclosing the location of a nearby safe-deposit box. Quaid cuts the cell phone out of his hand to avoid being traced. In the safe-deposit box Quaid discovers a recorded message from his former self, leading him to an apartment in UFB.
On the way, he meets Melina (Jessica Biel), the woman from his dreams. At the apartment Quaid uses a piano to trigger a second recorded message. The recording reveals that Quaid was formerly Carl Hauser, a highly skilled agent working for Chancellor Vilos Cohaagen (Bryan Cranston). After associating with the resistance movement, Hauser was captured and implanted with false memories of life as a factory worker. The recording tells Quaid that Hauser had seen a code to stop the plan and that it is still in Quaid's memory, and can be recovered with the aid of resistance leader Matthias (Bill Nighy). It further reveals that the resistance movement is not behind recent terrorist attacks against the UFB, but merely a plot orchestrated by Cohaagen's administration, of which he plans to destroy the Colony and unite humanity under the UFB. Melina reveals that she was Hauser's lover, but the two were separated when Hauser was captured.
Tracked to the apartment by the police, Quaid and Melina find themselves surrounded. Quaid's friend Harry (Bokeem Woodbine) arrives and tries to convince Quaid that he is in a Rekall induced dream and that killing Melina is the only way to wake up. Quaid is conflicted, but seeing a tear in Melina's eye, he concludes that he is not dreaming and kills Harry. Quaid fleeing with Melina eventually escapes Lori's pursuit by utilizing the elevator shafts in the building.
At the Resistance headquarters Matthias attempts to recover the code from Quaid's mind. On accessing Quaid's memories it is revealed that the code was a plot to allow Cohaagen to locate Matthias. Cohaagen and his forces arrive and kill Matthias and the resistance members, and capture Quaid and Melina. Cohaagen plans on erasing Quaid's personality and restoring the memories of his loyal agent Hauser. Quaid is able to escape with the aid of Hammond, who has infiltrated Cohaagen's forces, but dies in the process.
Aboard The Fall, Quaid finds Cohaagen's robotic forces in stasis. He plants time-detonation bombs aboard The Fall before rescuing Melina. They are pursued by Cohaagen's human forces and ultimately end up on top of The Fall. Quaid is shot and separated from Melina. Cohaagen prepares to kill Quaid but is interrupted by Melina who has boarded a Federation gunship. While Melina kills Cohaagen's forces, Cohaagen and Quaid engage in a brutal hand-to-hand fight, culminating in Quaid injuring Cohaagen while the bombs detonate. Quaid and Melina just barely escape the explosion and The Fall is destroyed, incinerating Cohaagen in the process.
Quaid wakes up in an ambulance and is greeted by Melina, but he notices the absence of a gunshot wound on her hand and realizes it is Lori in disguise. Lori overpowers Quaid and prepares to shoot him, but he manages to disarm and kill her. Quaid and Melina are reunited and embrace as a Rekall advertisement plays in the background.
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