Docks of New York

Late one night on New York's poor East Side, a man is stabbed on a street corner and the attacker pockets the victim's belongings. Glimpy shows Muggs a jeweled necklace he found near their tenement, hinting at a larger plot. The attacker spots the boys and gives chase, but the arrival of the police interrupts the pursuit.

Back at their tenement, Mrs. Darcy explains that a thief has stolen her valuable necklace. She identifies the found necklace as hers and suspects Compeau, an accomplice of Toscanian Gestapo. She asks the boys to keep the heirloom until the next day.

At a Toscanian mansion, Compeau reports his bungled robbery to Prince Igor Mallet. Mallet has hired him to kill Saundra so he can inherit the throne, offering the stolen necklace as payment.

The next morning, Muggs calls the East Side Kids for a meeting. They decide to have one diamond from the necklace appraised at Kessel's pawnshop.

Saundra goes to Kessel's to pawn an imitation necklace, unaware she is being followed by Compeau. A few minutes later, the boys arrive and stumble upon Kessel's stabbed body, and the police arrest them.

At the police station, Capt. Jacobs forces Muggs to hand over the diamond, but none of the boys will reveal its source. The tension rises as the investigation presses on.

Compeau and Mallet realize the necklace from Kessel's is an imitation. Mallet sneaks into Saundra's apartment, finds they have moved, and discovers a coded message left by Mrs. Darcy that points to their new location.

Compeau reads a newspaper item about the diamond and swindles Capt. Jacobs into believing the gem is his. The boys are released and Compeau tails them to their clubhouse, where he demands the necklace at gunpoint. Glimpy disarms him and grabs the necklace; Compeau escapes, but Skinny and Sam follow him to the mansion and report his movements back to Muggs.

Marty, Glimpy's Merchant Marine cousin who is in love with Saundra, reveals to the police that he went to Kessel's before being found dead to buy an engagement ring. He is arrested on suspicion of murder.

Mrs. Darcy phones Muggs with their new address, but Mallet shows up first and confronts Saundra. He starts to strangle her, but the boys arrive just in time to interrupt the attempt.

Saundra informs the gang that the necklace they took from Compeau is a fake. The boys pledge to retrieve the real necklace and head toward the mansion.

At the mansion's vicinity, the gang learns that the prime minister is in the country. They stake out the mansion and see the women being taken inside, fearing Saundra and Mrs. Darcy have been kidnapped.

Muggs sends Glimpy to alert the police, and the gang breaks into the house, taking Compeau by surprise. Mallet arrives and a fight erupts; the boys overpower them and expose their crimes to the police and the prime minister.

Marty proposes to Saundra, and the couple imagines a future together as prince and princess, with plans to return to Toscania when the danger is over.