Someone called 'Fat Sam' is hosting his 'Grand Slam' and is worried about his rival, 'Dandy Dan' messing it all up. Meanwhile, 'Bugsy Malone' trips over 'Blousey Brown's' bag and starts flirting with her. But then all goes bad when 'Dandy Dan's' men come in with their splurge guns and start shooting everyone! Luckily, no-one gets injured.
All of Dandy Dan's men continue to attack Fat Sam's Empire by splurging all of Fat Sam's gang in the process. Fat Sam sends the rest of his men out to see if they can track down the splurge guns but this was not the right move to make. All of Fat Sam's gang get trapped in a laundrette and splurged with Dandy Dan's guns.
Bugsy later returns to Fat Sam's so Blousey can have her audition. While Blousey is gone, Fat Sam's girlfriend 'Tallulah' flirts with Bugsy but Bugsy rejects her flirtation. After that she just gives him a big kiss on the forehead as Blousey comes back from her audition. Blousey gets jealous and will not talk to Bugsy for the rest of the night. Fat Sam tells Blousey that she made the audition.
Fat Sam hires Bugsy to accompany him to a meeting with Dandy Dan, bad news because it turned out to all be a trick and Sam paid Bugsy for helping him escape. Bugsy goes to a lake and promises that he will take Blousey to Hollywood with the money. When he returns he is attacked and his money is stolen. Bugsy is saved by someone called Leroy Smith who Bugsy offers a boxing job.
Fat Sam offers Bugsy some more money to help take down Dandy Dan after his assistant is unintentionally killed. Bugsy refuses but then finds out its enough money for him and Blousey to still go to Hollywood. Bugsy hires a samll group of workers from a soup kitchen ('Down-and-out'). All of them and Leroy head to Dandy Dan's warehouse.
After they take the crates back to Fat Sam's, Dandy Dan's gang arrive at the same time and there is an all out brawl with splurge guns which covers everyone with custard except for Bugsy and Blousey. The piano player is hit with a cream pie which makes hit a bass note which causes silence in the room. Everyone realises that they can all be friends and Bugsy and Blousey leave for Hollywood.
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