Throughout the film, Ronnie becomes obsessed with catching a flasher who has been terrorizing shoppers at the mall where he works. His single-minded determination to apprehend the culprit leads him to engage in increasingly reckless and destructive behavior, alienating those around him and putting himself and others in danger.
In the climax of the film, Ronnie finally confronts the flasher, who turns out to be a mentally disturbed man named Saddamn (played by Randy Gambill). A tense and violent confrontation ensues, during which Ronnie brutally beats Saddamn and takes him into custody.
With Saddamn apprehended, Ronnie believes he has finally achieved the recognition and validation he craves, but his victory is short-lived. As the police arrive at the scene, Ronnie is shocked to learn that his efforts to catch the flasher have been in vain, as the real perpetrator has been apprehended by the police elsewhere.
Realizing that he has made a grave mistake, Ronnie’s delusions begin to unravel, and he is forced to confront the consequences of his actions. His reckless behavior has caused harm to innocent people, including Brandi (played by Anna Faris), a makeup counter employee he has been pursuing romantically.
In the aftermath, Ronnie’s mental state deteriorates further as he grapples with the reality of his situation. His dreams of becoming a hero are shattered, and he is left to face the consequences of his actions alone.
The film ends on a bleak note as Ronnie, broken and disillusioned, continues to patrol the mall as a security guard, his aspirations of becoming a police officer dashed. Despite his flaws and shortcomings, Ronnie remains a tragic figure, a victim of his own delusions and insecurities.
Overall, the ending of “Observe and Report” is a dark and unsettling conclusion that explores themes of delusion, obsession, and the consequences of unchecked ambition.