LOS ANGELES (Reuters) - There's a new demon in town, and she's hiding among the toys.

"Annabelle," out in U.S. theaters on Friday, kicks off October's Halloween offerings at the box office with the origin story of a porcelain doll that masks a sinister secret, a prequel to last year's Warner Bros. horror hit "The Conjuring."

Set in 1970s California, young newlywed couple Mia and John, played by Annabelle Wallis and Ward Horton, settle into a small house in Santa Monica.

Soon after pregnant Mia receives Annabelle, a gift from her husband for her growing doll collection, the couple endure a terrifying break-in, and then strange things start happening.

The couple move to a new home, but something dark follows them and haunts their baby daughter.

"It was set in the '70s at a time where movies of the genre were very well respected," said Wallis. "I think the element of truth to it, that it stems from real events and whether or not you believe in occult, there are documented things that happened."

Dolls are usually associated with innocence and playfulness, but have been distorted into dark creatures in numerous horror movies, such as 1987's "Dolls" and Chucky the serial killer in 1988's "Child's Play," which spawned numerous sequels.

In "The Conjuring," directed by James Wan, Annabelle is possessed by a twisted supernatural force, and the doll's porcelain face becomes warped into an evil grin.

"For an inanimate object, (Annabelle) really stood out and when 'The Conjuring' came out, it was validated to us how much people loved her character," said Wan, a producer on "Annabelle."

Classic horror homages are sprinkled through "Annabelle," namely Roman Polanski's 1968 cult horror "Rosemary's Baby," referenced in the couple's names for actors Mia Farrow and John Cassavetes.

Wallis said she took inspiration from Alfred Hitchcock's icy blonde leading ladies, while director John Leonetti said he was influenced by Hitchcock's use of suspense, as well as 1973's "The Exorcist" and 1976's "The Omen."

"Annabelle," made by Time Warner Inc's Warner Bros studios for an estimated $5 million, is expected to earn $27 million in its opening weekend, just behind the $31 million debut of thriller "Gone Girl," according to Boxoffice.com.

"Annabelle" belongs to a recent wave of paranormal films that have edged out gory horror offerings and drawn studios back to the genre.

The "Paranormal Activity" franchise, initially independent productions, has exemplified the success of low-budget horror that scared up big box office sales for its distributor, Viacom-owned Paramount Pictures.

Comcast Corp's Universal Pictures tested the waters with August's "As Above So Below" and this month's "Ouija."

"Back in the '70s, all the great horror, scary, suspense movies were made by the studios," Wan said, adding that he and Leonetti wanted to "hark back to that spirit."

"We believe that you can make something that's studio quality filmmaking, but retain what we love about this particular genre."