On Halloween 1988, one year before the main events of the first Puppet Master movie, Neil Gallagher had discovered André Toulon's secret hiding place and became the puppet's new master. He took the puppets to an all girls sorority house and pretended that his car had broke down and needed to use their phone. After being let in he commanded the puppets to kill the four girls and one of their boyfriends that were inside.
He did this so he could use their corpses as test subjects to try and make the elixir work on human beings and not just the puppets. After the puppets fulfilled this command he was unhappy with the results in which they died, in particular the victim that Kahn had murdered. As a punishment he drained all of Kahn's elixir out of his body and planned to use it for himself.