This place is seriously creepy. It's permanently dark, and there are ghosts and zombies haunting the outskirts of town. How did it get this way? And, more importantly, can you fix it? Let's find out.
Walk left from the place where the Runaway Five dropped you off. Go into the drug store to upgrade your equipment.
Go into the tent in the center of town to learn that zombies are starting to take over in Threed. I guess these people didn't prepare for the zombie apocalypse. Near the hotel is a kid who says that a suspicious woman has been seen talking to the zombies.
Go to the graveyard in the northwest of town. Be careful of the garbage cans: some of them might be monsters. Make your way to the very northwest corner of the graveyard, where you will find two zombies blocking the way to a ladder. They will look at you and then go back to their creepy guard duty.
There is nothing that you can do now but exit the graveyard. Back in the town proper, you will find a man in a black hat near the hotel, who is ogling a scantily-clad woman standing near the hotel entrance.
I like to mute the sound right about now, because it will get extra-creepy in a just a moment.
Follow the woman into the hotel. You can save your game in the lobby if you wish (but I recommend not doing so, because the music is just so dang creepy.) The woman will quickly make her way to the rooms of the hotel. Keep following her, and go into the hotel room that she goes into.
IT'S A TRAP! You and Paula will be ambushed by ghosts and zombies (although why couldn't you just open the door behind you and run away?) The screen will fade to black, and you and Paula will awaken in a dark cave with a locked metal door. Upon discovering that the door is locked, Paula will send a psychic message to Jeff, a friend that you haven't met yet.