Los Angeles has changed considerably, having become a community of peace. During their incarceration, prisoners are subject to reconditioning to change their behavior.Thirty-six years later in 2032, the prison is still in operation. Spartan is charged with involuntary manslaughter and sentenced to a 70 year term in a new prison where the inmates are cryogenically frozen. Spartan's chief tells him to get a good lawyer. Phoenix claims that he told Spartan about the hostages and that Spartan said he didn't care. Phoenix yells that Spartan was wrong and a fire chief suddenly informs them all that they've found about 30 bodies in the rubble which can only be the bus passengers. Spartan also tells his chief that he'd done a thermal scan of the building and found only Phoenix and his goons there. The building collapses just after Spartan makes it to safety.When Spartan's captain shows up, he immediately chastises Spartan for destroying the building per his usual methods (hence, his nickname 'The Demolition Man'), however Spartan tells him that Phoenix had deliberately rigged the place to explode. Spartan grabs Phoenix and runs out of the building while the flames ignite several barrels of C4 explosive. He defiantly refuses to give up the hostages and flicks a lit cigarette toward Spartan, igniting the gas.

Phoenix catches Spartan off guard, showing him the pool of gas and brandishing a lit torch. Spartan arrives and orders Phoenix to reveal the location of the hostages.

When Phoenix sees Spartan's approach on his security cameras, he grabs a dagger and punctures several barrels of gasoline, spilling it onto the floor. Spartan bungee jumps onto the roof of Phoenix' headquarters and fights his way through the structure, defeating several of Phoenix' guards. When he kidnaps about 30 passengers from a city bus, an LA supercop, John Spartan, whom has a reputation for destroying property while working on cases and a long history of reprimand by his superiors, is sent in to arrest Phoenix and rescue the hostages. The most powerful gang leader, Simon Phoenix, has set up the largest and most dangerous territory for himself, with his headquarters inside a large, dilapidated building. In the year 1996, Los Angeles has become a crime-ridden hell where street gangs control the city.

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