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Beautiful young Wendy lives behind a pawnshop with her uncle Bill, the owner, who keeps her sheltered from the outside world. Uncle Bill also helps out a young neighborhood gang by providing them with musical instruments and space in the pawnshop to practice. When the boys tease Wendy about her belief in fairy tales, their kind-hearted leader, Johnny, stands up for her. One day as the boys practice with the local policeman, Mike, a one-legged stranger named Peg Leg pawns a violin, which Uncle Bill recognizes as a costly Stradivarius, stolen from a murdered composer. Uncle Bill stores the violin in the pawnshop basement for safety, but by the next morning, it has vanished. Johnny, fearing for Uncle Bill's safety, dissuades him from reporting the theft to the police and instead rounds up his gang to apprehend Peg Leg. Within hours, the boys have imprisoned three one-legged men in their garage, including an organ-grinder, an innocent bystander, and the real Peg Leg. Soon after, a man in a raincoat kills Peg Leg and then arranges to meet Johnny in a warehouse that night. When Johnny goes to the warehouse, however, the man reveals himself to be Uncle Bill, actually the leader of a band of thieves who use the pawnshop as a front to hide their stolen goods. While he tortures Johnny to discover how much he knows, Johnny's gang locates the warehouse and sets a fire outside to distract the outlaws. They rescue Johnny, but in the confusion, Uncle Bill and the crooks escape. Uncle Bill returns to the pawnshop, where Wendy sees him in his raincoat, realizes his true identity and denounces him, but when he steps toward her threateningly, she falls down the cellar stairs. At that moment, Johnny and the boys, with Mike, burst in to capture Uncle Bill. Johnny credits the arrest to Mike, who receives a promotion in return, and while Wendy recovers from her fall, she turns to Johnny in thanks.