The imperious Dean of Discipline, Kurt Fust, tells Nick that he must take a study course in classroom management in order to continue teaching at the school. Although he is nervous about being a student again, Nick is even more upset to learn that his instructor is Fust. Fust enjoys making the class especially difficult for Nick. To prepare for the final examination that determines whether or not Nick will remain the kids' teacher, Nick studies all night with his friends Mezz Crosby and the beautiful and caring social studies teacher Elana Lewis. When Fust declares that Nick has failed because he incorrectly answered a particularly difficult question on educational theory, Nick's highly intelligent student Sarah enlightens Fust with the latest data from a psychological journal. To the delight of the kids in his class, Nick passes! Meanwhile, worried that she will be ostracized because of her superior intelligence, Sarah changes the topic of her class presentation from a classic literar

When Fust accepts a promotion to an administrative job in another area, Nick is named the new dean of discipline. Nick changes all the rules and allows the kids to have fun like never before. But soon the students plan more and more outrageous pranks, and chaos reigns. When Nick finally realizes that he must be stricter, the kids resent him because they thought he was their friend. With Elana's help, Nick convinces his nemesis Fust to return to his former job, allowing Nick to do the same -- and Nick immediately resumes provoking Fust.

The school's band hosts a fund-raiser to earn money for new equipment. Everyone in the school gets involved recycling cans and donating the redeemed deposit money. Nick and Mezz relive their childhood as they compete to determine whose class can get more money for the band. Finally, when both classes end up with the same amount, Nick and Mezz decide to settle their rivalry in an unusual forum: a sumo wrestling ring. The match results in a tie. Meanwhile, Sarah wants to look like the other girls in her class, so she consults the popular Anna-Maria for makeup help—with surprising results.