It is the end of the school year at Third Street School, and T.J. is excited to be out of school and spend the whole summer with his friends. Unfortunately everybody else is going to various camps for the summer to look ahead at the future. Soon afterward, T.J. notices strange people hanging out inside the school performing weird experiments, and nobody believes him. After he gets all his friends back together they are initially skeptical, until they too see the strange goings on. They soon find Principal Prickly held hostage by a man named Dr. Phillium Benedict, former Third Street School principal, superintendent and U.S. Secretary of Education who lost his job and the love of his girlfriend Muriel Finster after trying to abolish recess in schools. Now he has a plan to change the orbit of the moon plunging the Earth into an eternal winter and forcing kids to stay indoors, so no Summer Vacation can occur. Now the kids of Third Street, friend and foe alike, must team up and stop Benedict's plan.