This is the story of a wicked woman. She uses a devilish manner to fulfil her desires and she is helped by the spirit of a beautiful girl Lily (Jyoti Rana).
Actually Lily was Tony's (Rajkiran) wife. Tony had been unfaithful to Lily and had tortured her to death. Lily has come back as a spirit to haunt him and his family and to take revenge. Her first victim is David who is also killed by the devil.
David's brother Peter has the ability to see and fight with spirits. David's spirit comes and tells Lily's secret to Peter who goes to Tony's house where Tony is getting married to Nancy (Afreen Khan) for the third time. The devil (Shakti Kapoor) comes there and sings a qawali, Peter confronts him but just at that time Inspector Harry (Kizar Khan) and his assistant (Rajesh Puri) intervene and thus the devil and Lily escape with Tony's younger brother, Johny. They take him to a Graveyard and kill him there. Inspector Harry holds Peter responsible for this murder.
Inspector Harry is in love with Daisy (Monika) who is Peter's sister. He and his wife (Sanchi Shrestha) suspect Peter of all the killings in the city. Harry wants to catch Peter red-handed whereas Peter is trying to save Tony's family and to bring an end to the wicked witch who is doing all this. Then : - Does Peter succeed? - Does Harry catch Peter? - Do Harry and Daisy get married? - What happens to Tony and his family? - What happens to Lily and the wicked witch? ...who is she really?
To find the answers to all these thrilling chilling questions - See 'Daayan' on the silver screen!
(From the official press booklet)