Plot

Timmy is a bright boy but a lousy student. His teacher, Mrs. Stevens, has threatened to fail him. While he is supposed to be working on a current events project, he captures an escaped convict and holds the man hostage in his tree-house.

Timmy Taylor and his two friends, Stevie and Buddy capture escaped convict Carl Banks (Jim Varney) and hold him hostage in their treehouse over the weekend so that Timmy can use Carl as his current event project at school on Monday. The boys then find that Carl is mixed up in a counterfeiting ring that could spell trouble for them too.—van_whistler@hotmail.com

Carl Banks (Jim Varney) is a dangerous counterfeiter who escapes from prison in the opening scene. Meanwhile, Timmy Taylor (Joey Zimmerman) is a 10-year-old student who has a current project due on Monday and if he shows up empty handed he is going to summer school, simply because of his participation in class, and that his teacher Mrs. Stevens (Louan Gideon) and Principal Ott (Richard Kline) hate him.

Carl Banks tries to print some more money and finds one of the counterfeit plates but can't print any money when his crooked ex-boss and a pair of corrupt cops, who are counterfeiters as well, catch him at his base. He runs into Timmy Taylor's backyard and ends up in his tree house. Timmy and his two best friends, Stevie and Buddy, keep him hostage in Timmy's tree house so that Timmy can take him to school on Monday to ace Current Events.

However, keeping a major criminal hostage is more of a handful than they expected, due to the huge wedgies that Carl delivers. Until Timmy figures out that Carl is in the middle of a major counterfeit ring, Timmy and his friends help get revenge on the men who treated Carl badly (surprisingly, Timmy's principal is Carl's ex-boss who turned him in to the authorities), in exchange for counterfeit money, of course.

Timmy and his friends persuade his neighbor and rival Janie Paulson (Aria Noelle Curzon) and her friend Angela to help them create a fake cash plate in order to lay a trap to capture Ott and his men. The evil principal gets away, Carl is set free as the kids tape recorded them running into the counterfeit gang and it proves Carl's innocence. Carl is offered by the police witness protection if he cooperates and he does.

At school on Monday, Timmy's teacher, Mrs. Stevens, doesn't believe his story until the police show up with Carl and arrest the principal for being the counterfeit gang's leader. As the school applauds Timmy and celebrates Ott's defeat, Janie kisses Timmy on the cheek. Timmy also gets a reward check for his actions. However in the final scene, Timmy's pet dog, Kato, buries the paper check in the backyard later that night.