The East Side boxing champion Muggs answers a challenge to a fight against the West Side champ but just before the match he is kidnapped. His friend Danny Lyons takes his place and wins the fight, only to have Mugs believe that Danny was responsible for his kidnapping.

Muggs and Glimpy, two East Side Kids in the army, return to their neighborhood, supposedly on furlough; actually, Muggs has been honorably discharged with a physical defect, but he tells no one of this. Danny, another East Side kid, is in jail because a large amount of medical supplies have been stolen from the warehouse where he works. Muggs see Spider, a new member of the gang, flashing a large amount of money around, and Muggs shrewdly turns toughie, boasting that he has a dishonorable discharge because of thievery. This leads Spider to confide in Muggs that he is the one who has been aiding in the theft of supplies from the warehouse, and he gets paid for the loot by Larry, operator of a nightclub where Muggs' sister, Milly, is an entertainer. Fingers, a henchman for Larry, kills Spider when he learns that Muggs has been let in on the operation. The police then suspect Muggs of killing Spider.

Ordered by a judge to get a job, Muggs McGinnis is hired by wealthy Mrs. Murray, who has a penchant for picking up trouble-prone servants. At an engagement party for Mrs. Murray's spoiled daughter Brenda, Muggs enlists his pals as extra help.

A group of young men who work at an aviation factory begin to suspect that a doctor who runs an air ambulance service is secretly a spy transporting secret information from the plant to enemy agents.

Muggs is tricked into entering a Civilian Conservation Corps camp by Danny in order to get in shape. Muggs resists and battles with the camp captain and with other campers. He also becomes involved in trying to help one of his friends get out of trouble.

Rejected by the Army, Marines, and Navy for being too young, the punks help the war effort by throwing fruit at a shop they believe is owned by a Japanese American. Confronted by him wielding a short sword, the gang decides to come back at night but find him dead.