Muggs McGinnis, a talented jockey, finds himself at the center of a confusing and dangerous plot involving his prized horse, Turnabout. After an electric device is discovered near the horse following a race, Muggs is called in for questioning by track officials. Despite his insistence that the device was planted by Dollar Davis, a gambler who owns Turnabout, and his trusted associate Gaby O'Neill, Muggs is unfairly suspended from racing indefinitely. Feeling betrayed and disillusioned with the racing world, Muggs is prepared to give up on his riding career.
However, his next moves are driven by compassion and loyalty to friends. Muggs, along with his companions from the East Side Kids, learns that Mrs. Nora Brown — whom they affectionately call "Ma" — is on the verge of losing her stable due to unpaid feed bills. The gang, pooling their savings, gives Ma enough money to clear her debt, which had been bought up by the scheming Davis. Muggs then takes it upon himself to care for Ma's other horse, Sweet Alice, who has a lame leg. In a show of determination, Muggs sneaks Alice into their clubhouse in New York's East Side and arranges for her to be examined by an orthopedic specialist, leading to her eventual recovery.
Despite the obstacles, Ma's fortunes improve after she wins several races with her prized horse, Storm Cloud, which restores her financial stability. With her newfound prosperity, Ma is able to reclaim Alice and offers jobs to Muggs and his friends. She plans to enter Storm Cloud in the upcoming handicap race and, in an effort to rally her team, also decides to enter Alice, hoping she will motivate Storm Cloud.
Meanwhile, Elsie, Ma's niece who has recently started to develop feelings for Gaby, considers consulting a fortune-teller about the race. Muggs and his friends decide to spy on her at the local fair, where Glimpy Gloomy, disguised as a drunken fortune-teller, offers to "predict" Elsie’s future. During this encounter, Glimpy's harsh accusations about Gaby stir confusion and upset Elsie, who then runs away crying. The situation intensifies when Muggs, feeling betrayed, verbally insults Gaby, calling him a "four-flusher." Gaby, burdened with guilt, confesses to Davis that he intends to quit.
Davis, revealing his ruthless side, orders the thugs Joe English and Mike Hanlin to kill Gaby and drug Storm Cloud, believing the horse is key to beating Turnabout in the race. When the gang finds Storm Cloud drugged and unable to race, they suspect Gaby’s involvement. Muggs and Elsie head to Gaby’s hospital and learn that he has been shot and is recovering. Unable to question him then, Muggs returns to Ma, who decides not to run either horse in the race. However, Gaby soon recovers and agrees to clear Muggs’ name, which prompts Davis to send his henchmen to eliminate Gaby once more.
In a tense climax, Muggs and the gang rush to Gaby’s rescue, managing to thwart the villains just in time. They sneak Gaby out of the hospital and race against Davis’s thugs to the racing official’s office. Muggs's team finally clears him to compete, leading to the big race where Muggs rides Sweet Alice and wins, proving that loyalty, perseverance, and a good heart can overcome corruption. The story ends with Gaby and Elsie happily beginning their honeymoon, while Ma, grateful for her friends, looks forward to a brighter future.
