Faber College, Oregon. 1962. Jim Blutarsky, the younger brother of the John 'Blutto' Blutarsky (who has been drafted into the US Army), transfers to Faber and is pledging the legendary Delta Fraternity house, since he is a legacy. Robert Hoover and the Deltas throw a welcoming party for Blutto, but find that he is somewhat natty, doesn't drink, and is nothing like his brother. Meanwhile, the corrupt dean of Faber, Vernon Wormer, teams up with the stuffy and wealthy members of Delta's rival, Omega House, to plan another way to get the riotous members of Delta expelled ...

Dean Wormer is impressed by how far Blotto can punt a football, so he recruits him for the college football team for the upcoming big game. But when Blotto refuses to play, the Deltas secretly substitute the equally overweight, but far-greater clumsy, Flounder in his place, who by his own admission doesn't have a sports gene in his body. So it's up to Otter, D-Day, Pinto, and the rest of the Deltas to figure ways to help the team win and keep Flounder from... floundering on the field, and not give the Dean a reason to eject Blotto from college.

When it's known that 'Parents Day' is approaching at Faber, Hoover and the rest of the Deltas decide to somehow to trick the rival Omegas into leaving town (and away from campus) so they can switch the Greek letters on their house and the Omega's house so the Deltas' moms and dads will be visiting them in the clean Omega house, while the Omegas' moms and dads end up in the messy Delta house.

A speech by President John F. Kennedy about the fear of nuclear war leads to Greg Marmalard and the rest of the Omegas building an elite bunker for survival with campus security funds, while Flounder ponders the meaning of existence. When a faulty test alarm sounds like a real warning of missiles launching, everyone goes into action... with the Delta's throwing a 'Welcome Russians' party to end all parties, while the Omegas just prepare for the end.

Dean Wormer gives the Delta House one week to clean up the house or face expulsion because of a new college bi-law of displaying clean frat houses. So, Hoover and the guys hire a house mother to help get things together. Meanwhile, Blotto enters a weightlifting contest to try to win the money that is required to make repairs to the house.