Headless Fright

I was at a sleepover with a group of girls and we were all trying to freak each other out by telling scary stories. One girl, Amelia, told us of a legend her great-grandmother told her. It was said to have happened in the early 1900's. The story, originally called Red Child of Fire, went something like this...
It was Halloween night and everybody was out trick-or-treating. All the children in our small town were dressed up as vampires, witches, and such.
There was an old legend about a headless child wearing a long red cloak, supposedly a halloween costume, who liked to bring children who crossed her grave on Halloween down with her into the hot fires of her grave. Why Halloween night? We folk think it was because that was the night on which she was decapitated and died. People say she must avenge her death by bringing other children who are alive down with her to suffer, for why should they experience the joys of life when she can't? It is said she takes the children with her to her grave where she must stay, and she cuts off their heads so they will be like her. We are not sure why the child was decapitated and died. All we are sure of is that it was so horrible, and she can't rest in peace and must kill other children for self-satisfaction.
Anyway, there were four or five girls dressed up for halloween, going door-to-door to collect candy. They were all giggling and eating their candy when they passed the town graveyard. The girls all started to joke about the old headless child legend. Most of the girls believed in the story except the girl in the red vampire costume. She just laughed and told them there was no such thing as ghosts and that she would prove it by going through the graveyard by herself and walking across the grave.
They were all kind of scared to let her go, but they said ok because, hey, it wasn't them going. The girls told her that when she went, she was to drive a dagger from her friend's devil costume into the grave and then come back. They said they would wait for her to return.
So off the girl went, dagger in hand, until the girls could no longer see her. They waited for about fifteen minutes, and then they heard a shrill shriek! They all took off as fast as they could, because they didn't want anything to do with the headless girl. The girls all wanted to help their friend, so they ran off home to tell their parents.
When everyone got to the graveyard, there they found the girl, shaking uncontrollably and muttering to herself like a crazy girl about the child in red trying to drag her down to her grave. The people looked at the dagger the girl had driven through her long red cloak.
They later found out that when the girl had driven the dagger into the ground and had started to walk away, she found she couldn't and that something was holding her back. When she turned to look at what it was, all she saw was the red cloak she had on and panicked, thinking it was the child in red. She screamed and then went crazy. The legend tells that the girl, Suzie, stayed in a mental hospital for the rest of her life, crying and screaming all the time that the child in red was going to get her, especially on dark Halloween nights.