There are several possible storylines rumoured for the third Scream movie. Craven did verify however that it will be set in Hollywood. Possible plots include:
[1] Neve Campbell is assisting in the making of Stab 2, in an effort to be rid of her demons, when an actress is horrifically murdered on set, leading to more carnage.

[2] Sidney (Campbell) is walking around the set of Stab 2, when she is brutally murdered, leaving Gail (Cox) as the main star of Scream 3.

[3] Jamie Kennedy before his death wrote a script for a horror movie, which will be the basis of Scream 3.

Against the odds Scream was not only a smash hit, but also manged to re-invent the slasher genre. For years all "horror" films consisted of a supernatural killer, but Scream and its inevitable sequel Scream 2 changed that. Both the films made a staggering $100 million each at the US box office, although Scream 2 was by far weaker than the original. Both Kevin Williamson and Wes Craven have confirmed that Scream 3 is the last Scream in the series, hence I am pretty sure that it will live up to its $100 million tag, as long as it abides by certain rules. Firstly there should be a higher bodycount. Secondly a lot of great humour. And finally a smooth plotline with a great ending.