After being kicked out of his rock band, guitarist Dewey Finn faces a mountain of debts and depression. He shares an apartment with an old band member, Ned Schneebly, who is now a substitute teacher. Dewey accepts a job as a substitute teacher at a snobbish private elementary school where his attitude and hijinx have a powerful result on his students. He learns they are talented young musicians, and he decides to form a rock band with them to win the $10,000 prize money in a local band contest. Once Dewey wins a competition called "Battle of the Bands", the prize money would solve his financial problems and put him back in the rock music spotlight.