Pepe Nietnagel's father has a valuable stamp collection stolen in Amsterdam. Street musician Pit recovers it. To show his gratitude, Pit is invited to Baden Baden and enters the Mommsen Gymnasium. There, he joins Pepe in his pranks.
When the bank clerk Klaus Helwig is arrested on suspicion of embezzlement, his son Heintje, whose mother died at birth, comes to his grumpy grandfather's house. Heintje manages to win his heart and prove his father's innocence..
A new teacher, Dr. Dr. Bach, is transferred from his quiet village elementary school to the Mommsen Gymnasium, bringing along his nephew Jan. Bach's lackadaisical methods raise the suspicions of the other teachers.
Pepe Notnagel (who inexplicably had his name changed from the first movie's Nietnagel) and his classmates scheme to get around doing any actual school work by cheating or sending their teachers to the sanatorium. A Swiss documentary film maker disguises himself as his brother in law, who got a position as an exchange teacher, to aid his project of making a movie about the current youth.
