The ending of Halloween II (1981) is the point where the story seems to finish for good: Laurie blinds Michael with a gun, and Loomis then sets off a gas explosion that kills himself and apparently Michael. Michael is shown burning as he falls, and Laurie survives to be moved to another hospital at dawn.
What does it all mean? In my opinion, the sequence does two jobs. It closes the hunt that Loomis began in the first film, since he is willing to die to stop Michael, and it gives Laurie a decisive moment of her own, because she shoots Michael in both eyes. It could be argued that the blinding is the more important beat. In the first film Michael simply vanishes after being shot, and here the filmmakers take away the one thing he needs to keep hunting, his sight.
The staging matters as well. Loomis and Laurie lure Michael into an operating room, a sterile space that suits a killer who has spent the night moving through hospital corridors. Loomis tells Laurie to run, then ignites the leaking gas, and Michael staggers out burning before he collapses. Dick Warlock, credited as The Shape, recalled that the fire did not turn out as the director wanted, so the explosion was reshot. That is a practical stunt problem, and in my view the burning walk is the most memorable image the film has, partly because it was hard to get right.
The sibling reveal is the other piece that matters. Marion tells Loomis that Laurie is Michael's younger sister, adopted after their family's deaths, and that explains why Michael came to the hospital. It became a key part of the series' mythology, though not every later film keeps it. The 2018 trilogy, which follows Halloween (2018), is a direct sequel to the 1978 film, and Halloween H20 also skips the films between. By contrast, Halloween III: Season of the Witch answered this ending by dropping Michael altogether, and Halloween 4 brought him back as a man who had been in a coma and was being moved between hospitals.
Here is the practical takeaway: the explosion reads as a finale, and the sequels that followed had to find a way back from it. Our Halloween timelines explained guide shows how each one does that.