Act I: a unit of dramatic action and is about twenty or thirty pages long and held together within dramatic context known as Set-Up. It sets up the story, what is the story about, relationships among the characters and their needs.
Act II: it is about fifty or sixty pages long - know as Confrontation. Here the main character confronts obstacle after obstacle on the way to achieving his or her dramatic need. Dramatic need is what the character wants to win, gain, get or achieve during the course of the screenplay. The story will be about a character overcoming (or not overcoming) obstacles (created according to the known dramatic need) to achieve his or her dramatic need.
All drama is conflict. Without conflict there is no action, without action there is no character, without character there is no story and without story there is no screenplay.
Act III: it is dramatic unit about twenty or thirty pages long and is known as Resolution = solution. Does the character live or die, succeed or fail, win the race or not, get married or divorced?
How do we get from beginning to the middle? From Act I to Act II and then from Act II into Act III? By creating a Plot Point. A Plot Point is any incident, episode, or event that "hooks" into action and spins it into another direction, from Act I to Act II, Act II to Act III. There can be many Plot Ploints in a screenplay, but the ones that lock the story in place before you begin writing one word of screenplay are Plot Points I and II.
Those Plot Points "hold" the story in place, anchoring them to the story line.
THE SILENCE OF THE LAMBS (notes from the book)
Plot Point I of Act I is the discovery of Rapail's head that really begins the story. It is the natural lead into Act II: Who killed him? Was it Lecter? Or buffalo Bill? Only one person can answer it: Hannibal Lecter. It is a tense that completes the Action of Act I.
The discovery of cocoon is Pinch I the sequence in the First Half of Act II that holds the story together, the clue that keeps us on the trail. Without the Pinch it would be hard for the story to move forward, instead, it would curl up within itself and go nowhere.
Mid-Point of Act II: Lecter is strapped to a rolling hand truck. (moved to Memphis)
Key scene in Act II id when Clarice visits Lecter and he gives her information to track Buffalo Bill. He is both a teacher and a father to her. Buffalo Bill's dramatic need is to get a new "girl's suit". Lecter's desire is to obtain a view, so he is teaching Clarice how to hunt a serial killer.
Pinch II: Lecter's escape. Lecter has to get out of the building.
Plot Point II: the realization that Buffalo Bill must have know his first victim and Clarice alone check it out.
At the beginning of Act III, two elements are left unresolved: will Clarice find Buffalo Bill before Catherine's killed? and How does she resolve the relationship with Hannibal Lecter? Those two story points have to be addressed during the third act.
When Clarice finds the house of Buffalo Bill there is a tension which comes from the audience wanting the character to know what it knows, this technique generates the tension. This situation is called an "open" story. The audience knows what's going on, but the character doesn't. In a "closed" story, the audience learns what's happening at the same time character does.
Resolution: relationship with Hanibal Lecter: the phone call at the end of the film. ("have the lambs stopped screaming?")
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