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 ...

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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.

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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.

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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.

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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.

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The Deltas somehow manage to trick the Omegas into town and away from campus. The Deltas switch the Greek letters on their house and the Omega's house. So the Deltas' Moms and Dads are visiting them in the clean Omega house,while the Omegas' Moms and Dads end up in the messy Delta house. The Deltas switch the letters back before the Omegas return. Naturally, the Omegas never find out that this has happenned.

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Pinto gets severe acne on his face which makes him self-conscious about his looks, so his frat brothers try to help him regain his confidence. Meanwhile, Dean Wormer tries angling for grant money for the science program from a visiting military officer and his best chance at getting it is Hoover's new science project.

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When Flounder falls in love with Mandy Pepperidge, it's up to the Delta's to make her see him as the man of her dreams, the new big man on campus.

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Dean Wormer is in trouble when his wife, Marion, apparently finds him in his office with a young co-ed. So, Hoover and the Deltas offer to help him out hoping that their services will make him more lenient on them despite the fact that they don't trust him to keep his word.

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When Blotto gets into trouble one too many times, Dean Wormer expels him from the college. However, the tables are soon turned when when the Dean accidentally hits Blotto with his car and he's forced to accept a set of demands by the Deltas to prevent Blotto from filing a lawsuit against the entire college.

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Otter and the Delta boys plan to use The Bombshell to win a beauty contest, but when she is sent on an archaeological assignment by accident, they scramble for a replacement.

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After overhearing the blond, nameless Bombshell telling a friend that she has a liking for Delta frat guys, Hoover asks Flounder, Pinto, Blotto, and the rest of the Deltas to help set him up on a date with the Bombshell hoping to finally score with her.

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Kent 'Flounder' Dorfman's life is turned upside down when his parents want to transfer him to another college when they feel that the Deltas are a negative influence on him. Unfortunately for Flounder, the only place that will accept him is a women's college. But to the chagrin of Dean Wormer, Flounder's parents also threaten to cancel their annual monetary contribution to Faber College when they plan to take Flounder out forcing the Dean and the Deltas to reluctantly team up to find a way to keep Flounder at Faber.

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