The Ending Of Pet Sematary: Bloodlines Explained

Timmy is based on a character of the same name introduced in a single chapter of the original "Pet Sematary" book by Stephen King. In the book, the entire town knows that Timmy died at war, which is why the older Jud immediately knows what is going on when Timmy appears in town. However, the prequel movie takes a bit of artistic liberty. 

Rather than die at war, Bill announces Timmy is back, granted an honorable discharge and a Silver Star Medal. When Jud and Norma see Timmy while returning his dog, Hendrix, his behavior is odd. This is written off as a side effect of what he experienced. But, Bill is actively keeping him away from others, telling Jud he isn't ready for visitors.

Bill buries Timmy in the cemetery, resurrecting his son. It's implied that Timmy did die in the war or shortly after coming home. Despite trying to keep him under wraps, Timmy wanders around town at night, speaking to another descendant, Marjorie (Pam Grier) before siccing a resurrected Hendrix on her and crashing Donna's party before killing her. These events are only the start of what Timmy could do under the spirit's influence if he isn't stopped.