Hogan and Co are out on a work detail and use it to smuggle an operative, Hercules, and a package he is carrying, into Stalag 13. Hercules explains that the Nazis have found deposits of uranium in occupied countries and are hiding it in blocks of zinc oxide, such as the one he has brought with him. Hercules plans to take the sample to London, along with a list of locations of where the Nazis have hidden the uranium. However, a storm grounds all flights from London, so Hercules and his sample are stuck in the camp until it clears.
Unfortunately, during that time General Burkhalter arrives with orders from Hitler that all military establishments on the home front are to give all senior non-commissioned officers command training. For Stalag 13, this means Klink is to give Schultz command training of the camp and act as his advisor. They all think the order is crazy, but have no choice but to obey as it comes from Hitler.
Schultz has no idea how to command and turns to Hogan, who gives him a pep talk to boost his confidence. However, this backfires on Hogan when it all goes to Schultz's head. He turns into a tyrant who rules the camp with iron Nazi discipline and makes the prisoners' lives increasingly unbearable. He also doubles the security, which means they cannot use the tunnels to smuggle Hercules out. They try smuggling him out in the dog truck, but Schultz spoils their plan when he has the truck unloaded in the main camp instead of the dog compound. Hogan and Co realize that something must be done or Kommandant Schultz will destroy their operation.
Hogan suspects that the reason for Hitler's order is that he is planning to send the officers to the Russian Front. If he is correct, Klink will go to the Russian Front and Kommandant Schultz will become a permanent fixture. He uses his suspicions to persuade Klink to help him. Klink is agreeable because Kommandant Schultz is making his life unbearable too. Hogan has Klink remove Schultz's extra security so he can stage an escape (and smuggle Hercules out) to discredit Schultz.
When Schultz finds Le Beau and Newkirk have gone, he has no idea what to do. Burkhalter is not impressed, so he relieves Schultz of his command and restores it to Klink. Klink is crowing as he strips Schultz of his badges of rank and inflicts other harsh punishments on him. Hogan persuades Klink to moderate Schultz's punishment in exchange for finding Le Beau and Newkirk. Soon after, Klink receives an anonymous tip that the escaped men are at the Hammelburg Hauserfhof and heads out there. Le Beau and Newkirk affect a surrender after Klink accidentally triggers a discharge of machine-gun fire. Klink has Schultz pay for the damage.
When Klink demands to know how Le Beau and Newkirk escaped, Hogan says they pole-vaulted over the fence. Klink decides to try it as he was a pole-vaulter at school. He ends up crashing into the fence.