Those rambunctious kids are back in school and back in trouble in a smash sequel to the 1978 worldwide hit. Corey Feldman leads a rock and roll rally at Ronald Reagon High, but must triumph over the evil plans of the school's fascist principal, Vadar, who wants to halt the school dance and run their school like a prison.

16-year-old Jonathan Snazowski has a vivid imagination and lives in a dream world filled with adventure, fast cars, beautiful women and easy money. Unfortunately he only has partial control over his fantasies, and is constantly beset by obstacles from the dark and tangled reaches of his mind. A slightly demented psychologist, a rotten kid brother, neighborhood bullies, demons and even laser-toting sex police are conspiring to wreak havoc on his life. But Jonathan has a plan: he is going to defeat his enemies, get his car, win the girl and lose his virginity... even if it kills him!