The film's storyline revolves around the lives and families of three students in the EM3 academic stream, Terry Khoo, Liu Kok Pin and Ang Boon Hock. Terry, pampered and from a rich family, is a meek and obedient boy, with a domineering mother and a negligent businessman father. Kok Pin is pushed to excel at school by his mother, but he shows a talent for art, not academics — much to the consternation of his family. Boon Hock and his mother struggle to make ends meet with an absent father by running a small wonton noodle stall; to make up for the lack of a father figure, he places high value on loyalty and "manliness" in his friends.
The boys are often picked on for being in the "stupid" stream, which eventually leads to a fight during which one of the bullies is accidentally injured. In the principal's office, Boon Hock and Kok Pin explain what happened, but Terry declines to help them and stand up for himself, following his mother's instructions to "mind his own business", which infuriates his friends and causes trouble between the boys.
Meanwhile, Terry's father, Mr. Khoo gets in a fight with a man who turns out to be Kok Pin's father, Mr. Liu, over a parking space. Mr. Khoo's company is a client for Mr. Liu's firm, an advertising agency, and their new-found enmity causes Mr. Khoo to select the marketing campaign of John, an American expatriate, over that of Mr. Liu. As John's ideas are totally incompatible with Chinese customs, Mr. Khoo's business suffers as his customers are driven away. Kok Pin receiving his PSLE results
As the boys deal with their problems, a new teacher at school helps by inspiring Boon Hock to excel in mathematics, while reaching out to the other boys. Kok Pin continues to struggle, and enlists Boon Hock to help him cheat in the preliminary examinations, but they are caught. Unable to face his mother, Kok Pin attempts suicide, but fails to because of teens escaping the police (One of which is Selina, Terry's older sister). When he finally tells her, she tries to punish him but collapses; a doctor later diagnoses her with leukaemia, and tells Kok Pin that she will die without a bone marrow transplant.
As the end of the year approaches, Boon Hock excels in the PSLE mathematics exam, while the other boys manage to scrape by — Kok Pin only marginally. Contrary to Kok Pin's fears, his mother is satisfied because he has tried his best. When visiting Mrs. Liu at the hospital, the EM3 teacher announces that one of Kok Pin's drawings won second prize in an international competition — but the moment is overshadowed by the rush to save Mrs. Liu's life.
Mr. Khoo passes the transplant test, but refuses to donate after discovering the intended recipient is his enemy's wife. He eventually relents, but it is revealed that due to a mix-up Terry, not Mr. Khoo, is the suitable donor. Despite protests from his parents, he insists on undergoing the operation, which is a success. A grateful Mr. Liu offers to help Mr. Khoo's business with his proposal. As a result, Mr. Khoo's business booms, and the two enemies become good friends. The film ends with Terry being bullied again, as in the beginning of the movie — but this time, he stands up for himself and fights back.