Nicholas has been found employment by his Uncle Ralph at Dotheboys Hall, an academy for boys owned by the drunken and brutal Wackford Squeers.

Nicholas is appalled to find that Squeers is being cruel to the crippled boy Smike and makes plans to escape. Nicholas and Smike set out to London.

Nicholas finds employment with the kindly Cheeryble brothers while Smike is in for a shock after Squeers arrives in London and begins plotting with Ralph.

Smike gets captured by Squeers but help is soon at hand from John and Tilda. Meanwhile, Nicholas is directed by the Cheerybles to meet Madeleine Bray.