Billy McFarland FYRE Festival 2 Documentary in Production

Break out the popcorn, we've got a can't-miss train-wreck documentary coming through ... it's the latest installment in the ongoing saga of the Fyre Festival ... and we've got a sneak peek of the impending drama!

Billy McFarland tells TMZ ... he's been filming a new documentary as he attempts to launch PHNX, a December festival he's billing as his big comeback. Billy says he's rented an island and that cameras are following every move ... waiting to see if it's a redemption story ... or another disaster.

The project is expected to drop by late December or early January, and we're told the filmmakers are currently in discussions with multiple streaming platforms.

Titled "FYRE 2," the doc will explore one of the most infamous comeback attempts in entertainment history. McFarland has given full access to producers at Think Global Media Group and HIAMI Films, who've obtained thousands of hours of never-before-seen footage, including secret meetings with the Mexican government, artist negotiations, and behind-the-scenes moments from years of planning the reboot.

We're told the film will pose the ultimate question ... "Did Billy scam again, or was he scammed by Mexico?"

The doc captures McFarland's so-called "FYRE Survival Training," including a zero-gravity concert and airstrip performance in New York, helicopter jumps in Miami, and exclusive sessions with Grammy-nominated artists creating the original track "Onboa47rd."

And the cameras haven't stopped ... we're told crews have boots on the ground in Honduras, documenting Billy's new "FYRE 3" concept -- branded as PHNX -- as he returns to the Caribbean for the first time in eight years, scouting locations through Utila and the Turks & Caicos for what he calls the next chapter of the FYRE saga.

You'll recall ... Billy's seemingly never-ending effort to stage Fyre Fest 2 ended in failure this year, though the wannabe mogul did manage to sell the rights to the brand.

This new doc will serve as the sequel to the virally successful first exposé -- "Fyre: The Greatest Party That Never Happened" -- that chronicled the disaster and aftermath of the 2017 FYRE Festival.