Nicholas and his sister Kate arrive penniless and jobless in London after the death of their father. Nicholas has an important encounter with Newman Noggs.

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.

Noggs and Cheeryble come to Nicholas’s and Madeline’s aid as Squeers and Ralph finally get their comeuppance and the secret of Smike's parentage is revealed.