After the Enterprise responds to a distress call, Data saves the only survivor from the starship Vico, a young boy. The boy, Timothy, is intrigued by Data and begins to view Data as a hero. Timothy begins to emulate Data in every way he can. Timothy is amazed by Data and asks how he is able to do things fast. Data responds by saying that he is an android. Although strange, Counselor Troi says it is just part of Timothy's healing process. Captain Picard then tells Data to make Timothy the best android possible. Data then begins teaching him how to be an android. While doing so Timothy seems to open up and suggests that he has been having nightmares. However, when Data inquires about the nightmares, Timothy responds that he does not require sleep.
At the same time, the crew begins investigating the destruction of the Vico. It appears that Timothy has been lying about what happened. He said that there was a boarding party when in fact there were no traces of forces being transported onboard the Vico. After their scanners keep being reflected by the field in the black cluster, Picard performs an experiment by firing phasers into the nebula. They are refracted and Data therefore surmises that a disruptor style weapon would also be likewise reflected and thus be unable to attack the Vico. They once again ask Timothy what happened to his ship. He insists that they were attacked. Data then uses Timothy's fantasy of being an android to make him tell the truth about what happened by telling Timothy that "androids do not lie." Timothy then admits that he was responsible for the destruction of Vico. He explains that he lost his balance and his arm hit a computer console. Counselor Troi and the Captain try to convince Timothy that it was impossible for him to have destroyed the ship by simply touching a control panel.
The Enterprise shakes and Timothy says that is just as it started on the Vico. The wave front intensity increases and Commander Riker orders that he shields' power be increased to 75%. The ship is then shaken again harder than before. Picard comes out of his ready room and orders that the Enterprise leave the areas at warp 2. They continue to increase shield strength. In an attempt to find out what happened onboard the Vico, Data asks Timothy everything he remembers the officers on the Vico said before they were destroyed. On the enterprise, they increased their shield power by transferring warp power to the shields. However, the wave front is getting closer and growing in intensity. Data tells the captain to drop the shields, and the shields are dropped and the wave front barely rocks the ship. Data then explains that the shields caused the wave front to increase in power. He then states that this was also the cause of the Vico's destruction.
In the conclusion, Data and Troi are standing by the schoolroom. Troi says that Timothy still has a lot progress to make, but he is acting like a boy again. Data talks to Timothy and he says that he misses his parents but that he is all right. He also says that Data must have found it amusing when he was imitating Data. However, Data reminds Timothy that imitation is the highest form of flattery. Timothy asks if they can still do things together and Data says he would like to remain friends with Timothy.