A.J. and his friends are forced to take classes even during recess, but their teacher, Mrs. Lizzy, teaches how to make balloon animals and all sorts of other strange things.
A.J. fears his plans for a fun summer vacation will be ruined when Andrea Young, the most annoying girl in his class, winds up staying in the beach house next to his family's.
When peanut butter and jelly sandwiches start disappearing from the vomitorium, the security guard of Ella Mentry School, Officer Spence, starts behaving strangely and arresting everybody he sees.
New third grade teacher Mr. Granite has so many strange ideas about how to make Ella Mentary School environmentally friendly that the students are sure he must be an alien.
Mr. Granite is assigned a new student teacher but A.J. and his friends become convinced that she is actually a vampire who lives in a cave and plays in a heavy metal band with her zombie boyfriend.
A.J. and his friends are thrilled to finally be graduating from second grade, but when the PTA president turns the occasion into a madhouse, they begin to wonder if starting third grade is really such a big deal.