When the townsfolk find the swamp full of dead bodies, several people seek the old witch, Haggis, who lives in the swamp, and ask her to use her magic to get revenge. Like Ed Harley (Lance Henriksen of Aliens, AVP: Aliens Vs. Predator and TVs "Millenium" fame) requested in the first movie, Pumpkinhead is brought to life and plans to seek out all of the marked who were related to the organ harvesting. This means that Bunt, his sister, a local drug dealer and Doc Fraser (Doug Bradley who is best known as Pinhead from Hellraiser) have to do whatever they can to stop this demonic avenger.
Throughout the movie, Bunt is haunted by the ghost of Ed Harley, who keeps preaching to him about the dangers of revenge and how this vicious cycle will never end. As Pumpkinhead's targets are killed off, so are the people who summoned him until the remaining summoners and targets join together to try and stop the monster. This scene ends in a fairly dramatic manner and sets up the next sequel pretty well.
Unfortunately, the problems I have with Ashes to Ashes actually stem from the problems I have with Pumpkinhead as a series on whole. Quite frankly, it comes down to "I don't care about the victims." In the first film, they were some rotten little teenagers who accidentally kill a kid and when Ed realizes just how badly they are being killed, he thinks its too much for them. Quite frankly, I didn't care whether the teenagers lived or died. In this movie, the only character I felt any connection to was Bunt because we saw where he came from. The series suffers from a lack of character development in general and because of that, you don't care if Pumpkinhead goes after people who are, typically, bad.
If you are a fan of the Pumpkinhead series, then Ashes to Ashes is a good purchase. The more lanky Pumpkinhead makes him seem more menacing and the continuation of the original storyline makes the overall feel of the series a bit more connected. If you aren't a Pumpkinhead fan, or have never seen one of these movies, then start with the first one (rent it) before deciding to buy this movie.