Well-bred young English refugee Freddie Hewlett (Freddie Bartholomew) saves the life of Jimmie Fletcher (Billy Halop), wild boy of the road, in a fight with juvenile gang leader Bushy Thomas (Huntz Hall). Freddie takes Jimmie with him to his uncle's ranch, and the uncle, Ferguson (Joseph Crehan), sees the possibility of turning him into a decent boy and arranges to have him sent with Freddie to the select Pearson Military School. At Pearson, Freddie,of course, gets along splendidly (not to mention swell), while Jimmie incurs the enmity of his classmates. Not even the gift of an airplane, inspired by Jimmie, to the school by Mr. Ferguson shakes their dislike. Jimmie, who loves engines, is overjoyed while Freddie, with a phobia about planes as a result of a bombing incident in England, is frightened. Jimmie, because of an academic weakness that keeps him from entering the aviation class, steals the mid-term exam test. Freddie, of course, reports him. Jimmie, somewhat hacked because Freddie ratted on him leaves school and returns to his old gang. He finds Bushy, wanted for murder, hiding out with a gangster named Horner (Rudolph Anders using his WWII hide-out alias of Robert O. Davis). Bushy and Horner plan to steal the school plane and flee the state, and force Jimmie to lead them to it. Freddie, guarding the plane, recognizes Horner, of course, as a recognized Nazi saboteur - a rose is a rose whether named Anders or Davis - and gets knocked down. Jimmie fights off the gang until other members of the Academy come to the rescue. Jimmie is reinstated and gets a bye into the aviation class. And Freddie, of course, overcomes his plane phobia.