In flashback scenes, Detective Eric Matthews (Donnie Wahlberg) escapes the bathroom he was left in Saw II by breaking his foot. He gets into a vicious fight with Amanda Young (Shawnee Smith), who eventually overcomes him and leaves him for dead. Before she leaves, Matthews leaves several angry parting comments, calling Amanda a "junkie bitch" and telling her she isn't Jigsaw, causing her evident distress. Other flashbacks show that Amanda had been working with John Kramer, the Jigsaw Killer (Tobin Bell), prior to the events of the first film, and had been the one who actually instigated the abduction of Adam under Jigsaw's orders. After the events of the first film, it is revealed, she had suffocated Adam in a mercy killing.
In the movie's present, Detective Kerry (Dina Meyer), Sergeant Rigg (Lyriq Bent) and Forensic Hoffman (Costas Mandylor) are investigating the corpse of Jigsaw's latest victim Troy (J. Larose), intrigued by the fact that his trap was inescapable in a break with Jigsaw's M.O. When Kerry returns home, she is kidnapped and finds herself in a trap of her own. When the escape method given fails and Amanda arrives, Kerry realizes this trap is also inescapable and is killed.
Meanwhile, a dying Jigsaw orders the abduction of two final victims: Lynn Denlon (Bahar Soomekh), a skilled but depressed doctor, and Jeff Reinhart (Angus Macfadyen), a father obsessed with revenge against the drunk driver that killed his son. A collar holding several shotgun shells hooked to Jigsaw's medical equipment is locked on Lynn by Amanda, and she is tasked with keeping John alive until his tests are completed under threat of death (if John flatlines, the shells will go off and kill her.) Jeff is led through an abandoned meat packing plant where he is given the choice to rescue three of his top targets of revenge from a variety of timed traps. Jeff's attempts are mostly unsuccessful: he fails to rescue the bystander who did nothing to help him after his son was hit, and after saving the lenient Judge Halden (Barry Flatman) he accidentally fatally shoots him in a failed attempt to save his son's killer, Timothy Young (Mpho Koaho). With his tests nonetheless complete, Jeff leaves to find Jigsaw.
Lynn succeeds in keeping John alive, but during the course of operations he semi-consciously audibly professes his love for his old girlfriend Jill during a dream. Amanda interprets his comments as being towards Lynn, and in jealous anger does not follow his instructions to remove the collar after she completes her task. When Jeff reaches Jigsaw's room, Amanda shoots and wounds Lynn while Jeff fatally shoots Amanda in the neck. In her final moments, John expresses his disappointment with her over making her traps unwinnable, and that this was in fact a test designed for her. Her jealousy killed her, because by attacking Lynn she provoked Jeff to deliver a fatal blow. Last, Jigsaw reveals that Jeff and Lynn were in fact married.
Finally, John offers Jeff the chance to forgive him. Jeff opts instead to slash John's throat. Before he dies, John plays a tape explaining the details of Lynn's trap, explaining how he has effectively killed her, and that he has trapped his daughter in a room with a limited air supply and that he will have to play another game to find her. In short order the doors of the room seal, Lynn's collar kills her and Jigsaw dies, leaving Jeff screaming alone. The film ends with a quick montage of all the traps seen thus far in the Saw series.
Source: http://en.wikipedia.org/wiki/Saw_3