At the beginning of Cannibal Holocaust we are told that four young American filmmakers led by Alan Yates (and their guide) traveled to the Amazon... and never returned. The studio responsible for the project hires anthropologist Harold Monroe to track the kids down (if they are still alive) and recover the footage. After dealing with the tribes that inhabit the Amazon (who ominously speak of Yates' black magic and cower in fear upon seeing a white man), Monroe recovers the footage and things get really bad really fast.
Cannibal Holocaust is an absolutely amazing movie, easily the best of what was released during the wonderful Italian exploitation horror film boom of the late 70s through mid-80s. It's clever, very well-directed, and a total shock to the senses even today.
The very clever thing about this movie is that it's split into two separate but related movies. The first movie- where Monroe tracks down the lost footage- is shot like a typical movie, and by itself would have made an excellent adventure movie. The second movie is the actual lost footage, which Monroe watches and comments on. This movie is what you would expect of raw footage filmed by a bunch of kids running around in the jungle- shaky camerawork, lighting that changes from scene to scene, scenes without audio, etc.
You might think that it wouldn't work, that the switch from the first movie to the second would be too jarring, but it does work. The special effects are so convincing and the acting natural enough that I could understand how someone could believe that the Yates footage was real. If you do some research online you'll find that the actors playing the parts of the Americans were contractually obligated to lay low for a year after the movie was released. The director of the film was actually brought to trial for murder and had to call the actors out of hiding to prove they were not actually slaughtered on film.
But behind all the expertly crafted gore effects, and the clever framing device, the movie has a great story. Everything works so well that when in the final scene Monroe looks at the camera and wonders, "I wonder who the real cannibals are," instead of laughing at how ridiculous that is you find yourself thinking, "well that's a good question guy."
It's also got a wonderful soundtrack that is not only perfectly effective but well worth listening to on its own. One particular track plays whenever something really bad is going to happen, and it gets to the point where when you hear the synth effects that usher in the track, you'll think, "my god, what could possibly come next."
If you can stomach some really shocking scenes (including footage of real animals being really killed for real), it's an experience worth having. If you really want to be blown away, watch it after viewing the awful Cannibal Ferox.