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Billy Madison is a non-working, non-educated slacker who lives entirely off his dad. He spends his day drinking beer, reading girly magazines, and hanging out by the pool. When his father realizes that Billy is unfit to run the family business, Billy decides that he must go back to school and earn a real education. He figures it will be no problem going back to high school and learning over again, until he learns that his father bought Billy’s passing grades all the way back in elementary school. Thus, Billy must return to elementary school and pass each grade one at a time in a short time, or else he loses his place as heir to the company. In addition, Billy tries to win the hand of Veronica, a sexy school teacher who thinks her students are more mature than Billy.

After Kenny accidentaly kills a cop’s diabetic horse by feeding it the food he purchased from a munchie run, he is put in jail and is given a 1 million dollar bail. The rest of the group must bail Kenny out before Nasty Nate gets to him. The group decides to sell marijuana that Thurgood gets through his job as a janitor at a pharmaceutical lab. They become pals with rap star Sir Smoke-A-Lot and the rivals of dealer Samson Simpson. On the side, Thurgood seeks the love of Mary Jane, an anti-pot daughter of a dealer. What follows is typical pothead behaviour with a ton of cameos. Look carefully.