Prologue: The Sweathogs enter the classroom for the first day of the new school year. Arnold looks at all the 'bright and shiny faces' and tells them that it isn't so bad coming back to school; that they can use the sleep. Freddie says he hates the first day of school because it's too far away from the last day of school. Juan says he loves the first day of school because it's the only day he doesn't have to lie about what he did the day before. Arnold asks him if he's seen Vinnie; Juan says he hasn't seen Vinnie in a week. Sitting at Gabe's desk, Freddie says not to worry, that he likes to 'straggle in a month or two late.' Juan says the school looks the same, like 'they tore it down but forgot to haul it away.' Arnold says it smells the same too; Freddie says that it's either Juan's old locker or Gabe's old jokes. Gabe then enters and, seeing Freddie at his desk, addresses him as 'Mr. Kotter.' Freddie stands up and calls Gabe 'Freddie'; Gabe responds with a 'Hi there', then says he's looking forward to agreat school year. Freddie says he is happy about that and tells Gabe to take a seat. Freddie then starts to give the lesson, but Gabe yells 'Will you sit down!' and Freddie climbs overthe desk to get to his seat.
Part One: Arnold asks Gabe if he's happy that school is starting again. Gabe says that the first day is the second most painful day for a teacher; the first being payday. The bell rings and other students come in. Gabe says he has an announcement to make, but Juan sees another student in the chair he usually sits in. He gets upset, saying that he flunked math,historyandbiology in it. Gabe asks 'So?' and Juan says that it's his lucky chair. Gabe tells the girl to sit in another chair. Gabe tries to make his announcement again, but Freddie thinks it's another one, saying he never made the last one. Gabe says that it is the last one, and Freddie says that he's making the very last one. The class cheers and Juan and Freddie imitate trumpets. In his Groucho voice, Gabe says 'Thank you, Freddie Washington and the Buchanan Brass.' Then he asks if he can continue and Juan says 'Sointenly.' Gabe then says he thinks there are worse things than listening to his announcements. Carvelli and Murray then come in the room and Arnold says 'And here comes two of them now.' Juan asks if they are cleaning their cages back at their old school. Carvelli says he heard a joke from a human Brillo Pad and Murray repeats it. Carvelli then gives Gabe a note saying that they have been transferred. He also says that he was sorry that he was late but he helped hisaunt get rid of some things from her apartment: two old chairs and his uncle. Murray starts to repeat it and Gabe says he heard him, then he tells Carvelli and 'his echo' to take a seat. It turns out that they transferred into the Buchanan school district. Arnold asks if they moved because of vigilantes. Carvelli says that the city tore their building down. Freddie says that that is just like the city to tear down a perfectly good building and leave him standing. Carvelli asks if he has to get insulted by them and Murray repeats it. Gabe tries to get control back, but Carvelli says that he can personallyswitch their noses. Murray says that he can put Freddie's nose on Arnold and Arnold's nose on Freddie but when he gets to Juan he says that Carvelli will have one nose left over. Gabe then gets control back andsays he's going to make his announcement. Juan asks if it will be good news. Gabe says yes and no. Freddie says to give thebad news first, but Woodman comes in and Freddie says 'Boy, that was fast!' Woodman has an announcement of his own: that he is the school's new principal. Everyone is shocked.Freddie asks about Principal Lazarus and Gabe cracks that he got an easierjob: warden at a high-security prison. Woodman says that he retired and the school board selected the best man for the job; Arnold asks where that man is. Woodman says he is going around telling all the classes and thought he'd start at 'the bottom.' Arnold congratulates him and says he's glad that success hasn't gone to Woodman's head, in fact he can't see it anywhere on his body. Woodman is about to say something else, but Gabe tells him not to. Woodman asks if he wants to tell them that Gabe is the new vice-principal. Gabe gets upset that Woodman spoiled his big surprise. Freddie asks if it is true. Gabe says yes, but he will also teach some other classes. Arnold says that he's the first one of them to 'make it.' Juan gives him a 'Mazel tov on your face!' Woodman thinks that they are happy because now that Gabe is in 'high places' that they can get away with a lot more stuff. Juan does say that the possibilities are mind-blowing. Later, Julie is decorating Gabe's new office. Gabe is not happy. Julie says that they gave him Woodman's old job and his face as well. He says that he's a teacher, not an administrator. She asks if he wants to talk about it but he says no, then goes on about how his secretary didn't show up, and how after they found out about his promotion, Epstein ran around the school yelling 'Kotter's the VP! Kotter's the VP!' Julie says that she can be his secretary for the day; that she can call the sitter and ask her to stay with the twins for the day. Gabe asks what he's going to do about the Sweathogs and Julie says that she can have the sitter stay with them too. Gabe says that he's afraid that they will get away with murder now. He then does a bit how Gabe the teacher asks the VP that he must treat the Sweathogs differently because they have special problems, but Gabe the VP says that everyone must be treated the same. Julie says she liked the teacher, but hated the VP.Later, Woodman sees him in the hall and asks him how things are going. He says they are under control, but Woodman says that is what Gen. Custer says, then he gives Gabe a war whoop. Gabe goes into the classroom to see Carvelli and Murray tied up, sitting on his desk with apples in their mouth. Arnold says that Carvelli said that he wanted to be tied up; Freddie then says that Murray said he wanted it to, imitating his echo of Carvelli. Gabe takes the apple out of Carvelli's mouth and he takes a bite out of it. Gabe then tells the Sweathogs to go to his office.
Part Two: In Gabe's office, he asks the boys why they tied up Carvelli and Murray. Freddie says it wasn't like they did it to real people. Gabe says that they still need to be punished. He gives them detention for a week. They think he's joking but he is serious. Juan says that he isn't one of 'us' anymore, that he's one of 'them.' Arnold says that he never thought Gabe would be 'a them.' Gabe says that he has to do his job as vice-principal. Arnold says he's 'dropping out' on them. Gabe says that he will be there when they need him. Juan says that they may not be there when he needs them. Arnold says that they can drop out on him. Gabe asks if they are doing this because he gave them detention. Freddie says no, that whenever they got in trouble before that he covered for them with Woodman; but now he is Woodman. Gabe asks what they are going to do. Arnold says that they will get jobs. Juan says they can get good jobs for big bucks. Freddie says that he will be rich and famous in three years. Gabe sais it took him that long to pass geometry. He says they need a high school diploma to get any good job. He insists that they stay in school, but they insist they are dropping out. Gabe says that as VP he can help them get job experience. He says that there are jobs around school that they can do, like working in the cafeteria or the school store. He says that they can count as class credit toward a diploma. Arnold especially likes that they can go to class and not have any tests or homework or teachers. The boys huddle up and Juan says that they'll take it if he drops the detention. Gabe says three days, the boys huddle up again and Juan says one day. Gabe says two days as his final offer. Juan and Freddie go to hudle up again but Arnold steps between then and accepts the offer. A few days later, Woodman sees a horn on the school store and a sign that says 'HONK FOR SERVICE.' He honks the home and Freddie comes out. Woodman asks who is repsonsible and Freddie tells them Gabe is. Woodman says that he doesn't want Sweathogs running the school store. Freddie says that he should talk to the complaint department. He rings a bell and Arnold comes out. Woodman says that he thinks he's losing his mind. Arnold says that they don't handlesmall appliances, and Woodman leaves yelling for Gabe. Carvelli and Murray come up. He honks the horn, then Murray honks it also and Carvellu says one is enough. He says that they should get into a different business. He claims to have an extensive selection of auto parts. He says 'If I don't have it, just show me where it's parked.' Arnold starts to refuse, but Freddie quiets him and gives Carvellian extensive list, but he says he should get them off a moving car. Juan comes up with a film projector after showing a film for a class. Freddie starts to turn it on but Juan tells him not to, that it's delicate equipment. Freddie doens't believe he knows how to work it, but Juan shows him a film he showed, but it's stuffed into the can and ruined. Woodman comes up and tells Gabe they are destroying school property and tells him to handle it. Gabe says he's right and tells the boys to come to his office. Then Vinnie comes up dressed in a nice suit with a hat, a vest and a chain he twirls round his finger. He says that he got dropped out of school and got a good job at the county hospital by just walking up there. Gabe asks if there's any room for advancement and what money he's making. Vinnie pulls out 47 dollars. The boys are impressed, Freddie says it's almost a million dollars. Arnold says they get credit and Vinnie gets cash. Gabe says he didn't say what kind of job he has, but Vinnie says that he's 'on a bummer' and offers to take the boys out for pizza. They all decide to go with him. Juan says that he can be considered out to lunch permanently. Gabe says they're making a big mistake. Juan tells him to say goodbye to his lucky chair. Freddie closes the door of the school store and turns the sign around; it now says 'CLOSED.' He gives the horn one last honk and exits, leaving Gabe in the hallway by himself.