A gang of kids gets sent to a bad reform school for refusing to squeal; but a deputy commissioner takes over to reform the reform school.
A gang of teens brings things they stole to sell in a junk store, but the owner only offers $5 and threatens them. In a fight Spike (Leo Gorcey) knocks him out a candlestick, and they run away. Sue Warren (Gale Page) asks her brother Frankie Warren (Billy Halop) where he was, and he says he wants to buy her a typewriter. Judge Bob Clinton (Charles Trowbridge) asks the boys who hit the junk man. Squirt (Bobby Jordan), Fats (Bernard Punsley), Bugs (Gabriel Dell), Goofy (Huntz Hall), and Spike refuse to say who it was. Spike's mother complains her older son came out of reform school a murderer. Frankie says he did it, and Sue pleads for him; but the boys are sent to a reform school for two years.
Superintendent Morgan (Cy Kendall) refuses to give them supper they missed and hits Frankie. Red comes in and threatens the youngest for crying. So Frankie fights him and runs from being whipped but is caught on barbed wired. Mark Braden (Humphrey Bogart) calls on Morgan to inspect the school and sees Frankie in the hospital with cuts on his back. The doctor was drunk. Braden fires four guards, the doctor, and Morgan for running a prison instead of a school. Cooper (Weldon Heyburn) agrees with Braden but tells Morgan he will get rid of Braden. Sue complains but starts seeing Braden. He tries to help Frankie and lets the boys paint their dormitory, approving of the mess. Cooper gets painted and complains to Braden, who lets Cooper put them in the boiler room. They have to shovel coal to eat, and so Frankie has them raise the temperature over 100. When it blows, Squirt is injured; but Braden goes in and rescues him. Frankie thanks Braden and says he was wrong but is not punished.
Spike criticizes Frankie for following Braden. Sue visits Frankie and goes out with Braden. Braden asks Cooper about the books and the graft. Cooper warns Spike he'll get five years if Braden finds out he hit the junkyard man. Spike tells Frankie that Braden made cracks about his sister Sue, and Frankie hits him. Spike gets Cooper's car keys and a pistol so they can go to town. Cooper calls Morgan. Frankie goes in the window and almost shoots Braden, who tells a cop it was only his gun. Frankie tries to strangle Spike, but Braden stops him. Spike tells Braden that Cooper made him do it. Braden learns that Morgan got the commissioner; but he shows them the boys in bed and accuses Morgan of misappropriating funds. Braden fights Cooper, who is also taken away. In the final scene all the boys are paroled to school or trades.
This melodrama suggests that boys are shaped by their environment and how they are treated. A corrupt reform school puts money in the pockets of the staff while the boys suffer; but a humane one allows them to learn responsibility by giving them more opportunities.