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Mischievous schoolboys Penrod and Sam are constantly in trouble at school. They start their own club, the In-Or-In club, of which they are the only members. Two of their schoolmates, Georgie and Rodney, want to get into the club, but they are not allowed because they're always ratting out Penrod and Sam to the adults and getting them into trouble. However, George's father complains to Penrod's father about it, who tells Penrod that they must admit the two boys. Penrod and Sam decide that if they're being forced to accept the two stool pigeons, they'll make them pay for it.