Based on Sidney Kingsley's play, a murderer returns to his poor neighborhood, where a gang gets into small troubles compared to his.
On New York's east side rich apartments look down on poor tenements. Tommy (Billy Halop) and his gang take three cents from a new kid, but Tommy's older sister Drina (Sylvia Sidney) stops them from beating him and makes Spit (Leo Gorcey) give the money back. Dave Connell (Joel McCrea) is an architect, but paints signs, talks with Drina, and identifies Baby Face Martin (Humphrey Bogart) after ten years and plastic surgery. Kay Burton (Wendy Barrie) tells Dave she may marry a rich man, because she is afraid of being poor. The kids play poker, and Tommy plans a fight with another gang. Martin advises Tommy how to fight with tricks, and Dave tells Martin to leave. Tommy's gang beats up a rich boy, Philip Griswold (Charles Peck), and steals his watch.
Martin's ma (Marjorie Main) calls him a tramp, slaps him, and tells him to stay away. Martin takes his disappointment out on Hunk (Allen Jenkins). Tommy tells Drina he could buy sodas. Drina tells Dave her hopes and fantasies of a better life. Mr. Griswold (Minor Watson) holds Tommy, who cuts him with a knife, and tells policeman Mulligan (James Burke) to arrest the fleeing boy. Martin tells Hunk he would like to settle down. Francie (Claire Trevor) and Martin recall their engagement, but he realizes she is now a prostitute and gives her money. Hunk tells Martin it's better to go forward than back. Martin plans a kidnapping over Hunk's objection. Tommy tells Drina he has to go, and disappointed Drina plans to go with him.
Dave tells Martin to leave; when Martin refuses, Dave threatens to turn him in. Martin throws a knife in Dave's back, and Dave falls into the river but climbs out. Dave fights with Hunk, as Martin runs. Martin shoots at Dave and flees on the roof. Dave shoots Martin, who falls and shoots a cop before being killed. Dave learns he will get a reward, and Hunk is arrested. Spit is caught and rats on Tommy. Drina is told and tells Tommy they must leave. Tommy hides. The gang roasts potatoes. Tommy lures Spit with the prospect of getting $5 for having snitched. Kay with a fur finds Dave and suggests they could go away for a year; but Dave says they live in different worlds. Spit admits he ratted, but Dave stops Tommy from stabbing him. Dave tells Tommy to respect Drina, and Tommy turns himself in to Mulligan. Drina pleads for Tommy to Griswold, who suggests reform school. Dave says that Martin was in reform school and tells Drina he will hire a lawyer for Tommy. Dave sees Drina in a new way, and they hold hands.
The success of the Dead End kids spawned several sequels. This Depression story shows the origins of crime in poverty and neglect of youth and its dead end as epitomized by Martin's fate.