In Hollywood, California Los Angeles vice squad officer Ray Chang (Evan Kim) poses as a Chinese immigrant in an unmarked car to solicit a transvestite prostitute, who points a knife at Chang and orders him to drive. Chang's partner, Stevens (Joey Travolta), follows and has to drive on the sidewalk when his vehicle is pinned in traffic. When the prostitute realizes they are being followed, he accuses Chang of being a police officer. He admits his identity, struggles to disarm the prostitute, and bites her/his leg. When Chang stops his car, the prostitute runs away. The two officers chase her on foot and into a swimming pool. When Chang asks Stevens for help, he admits he cannot swim. The prostitute is arrested and taken into custody.
Some time later, Los Angeles Police Captain Jensen (Ronny Cox) meets with Pauline Stanton (Trish Van DeVere), a mother who has traveled from the mid-west to search for her only runaway teenage daughter, Lori (Robin Wright). Pauline Stanton shows Capt. Jensen a letter her daughter sent to a friend describing a man named James Walsh (Frank Gorshin), who has promised to jump-start her show business career. Pauline says Lori does not know how to cook, clean, or do laundry, and doubts she knows how to support herself. The captain asks his staff to start a file on James Walsh, owner of Pretty Girl Escorts. At his agency, Walsh accuses Lori Stanton of withholding her tips in order to buy heroin for herself. He orders her to stop stealing, then placates her with a "nickel bag" of the drug.
Back on Hollywood Boulevard, a potential customer tries to entice Betty Melton (Carrie Fisher), a vice officer disguised as prostitute, with his vibrator named "Mike." As soon as he offers Betty his services, officers descend to make an arrest, but the perpetrator escapes with a vice officer hanging from his car window. The man drives erratically, hoping to dislodge the officer, but crashes his car and is arrested. Betty Melton snaps at her fellow officers for moving in for the arrest instead of letting her handle it.
Later, Betty jogs in her neighborhood, and notices some children peering over a wall. Upon investigation, she witnesses the filming of a sadomasochistic pornographic movie scene from a involving an underage actor. When Betty informs Capt. Jensen of her discovery, he wants her to turn over her information to officers Tom Chavez (Eloy Casados) and Frankie Miller (Tom Everett). Betty tells Jensen she believes the department is prejudiced against women, the captain suggests that her competitive spirit makes it hard for other officers to accept her.
Back in Hollywood, as Pauline Stanton walks the streets looking for her daughter, Lori takes a customer to a hotel. Meanwhile, the captain assigns Officer Hawkins (Leon Isaac Kennedy), also known as "Hawk," and his partner, Judy (Cec Verrell), to find Lori. Hawk also wants to dismantle James Walsh's operation by posing as "Edward Debussy," a newly relocated competitor from Detroit, Michigan. Hawk suggests they buy girls from Walsh to start their own stable, and collect enough evidence to arrest him, and Capt. Jensen agrees.
Later, Chang and Stevens arrive at a crime scene to find a dead prostitute named Lilly, who worked for Walsh. Capt. Jensen orders them to investigate and share their information with Hawk and Judy. In a hotel room, Candy, a Walsh escort, interviews with Hawk/Edward Debussy. When he makes her an offer to join him, she is surprised when he turns down an opportunity to sample her services. Later, Walsh threatens Candy if she leaves him.
Still later, Betty Melton returns to the pornographic film set with Miller and Chavez. They explain that it is necessary to collect as much evidence as possible in order to obtain a search warrant. Walsh sends his associate, Farber (Beau Starr), to discourage Hawk/Edward Debussy from poaching his women, but Hawk lets Farber know that he only wants to deal with the top man. Walsh calls Hawk to set up a meeting. Farber warns Walsh to be careful, but Walsh has a secret weapon: "Daniello." At the meeting, Hawk wants to purchase or lease the finest girls and Walsh is agreeable.
At night, Betty Melton sneaks into the garage at the movie location. She sees incriminating photographs, and hears the director take a phone call. Later, Tom Chavez notes her actions were illegal, but Betty has come up with more leads.
At another meeting, Hawk informs Walsh he wants to buy three of his girls to work a party at a convention. Walsh rejects the party idea because it is too easy for police to arrange a bust, and offers to call shortly with an alternative plan.
On the street, Chavez, Miller, and Betty Melton watch the film house until Miller makes a run to the building and hears disturbing noises. Chavez insists they get a warrant, but Miller persuades him to act without one. The officers interrupt filming, and Betty captures the director as he attempts to escape through the backyard.
At the station, when the captain tells Pauline that Lori is working as a prostitute and is a drug addict, she is in denial.
In Chinatown, Walsh and Farber set up a trap with Daniello to follow Lori to her appointment with Hawk's men. Walsh meets Hawk at Diamond Jim's nightclub, where he offers two girls to entertain Chang and Stevens, who pose as conventioneers. Farber escorts them to their destination.
Back at the nightclub, Walsh brags about the assets of his top girl, Veronica, and suggests that Hawk/Debussy look under the table to see for himself. He observes Veronica pointing a gun held between her legs. Hawk tells his partner, Judy, that Walsh has a strange sense of humor.
At the Tropicana Motel, Farber informs Chang and Stevens that they can sample a girl, one at a time. As Chang walks to the room, Stevens reminds him to avoid sexual contact or they will lose the case.
Meanwhile, Hawk asks that Veronica point her gun somewhere else, but Walsh ignores the request. Veronica remarks that if Chang tries anything funny, there is a shotgun in a closet waiting for him. When Walsh prevents Hawk from using the bathroom, he upends the table. Veronica shoots him in the leg as he and Walsh fight. Partner Judy struggles to grab Veronica's gun, while Walsh escapes. When police arrive, Veronica tells them the name of the motel.
As the captain and backup units arrive, they devise a plan to rescue Chang when, after knocking Farber unconscious, Stevens returns to the motel and gives them the room number. Chang stalls for time, making idle conversation with Lori Stanton. Stevens sneaks in through the bathroom window, and motions to Chang to get away. Chang grabs Lori and ducks for cover. Daniello emerges from the closet, and begins shooting. When Capt. Jensen and his men kick in the door, Daniello shoots the first officer who enters. A gun battle erupts and Daniello is shot dead. Lori screams as the captain attempts to calm her.
At his office, Walsh grabs valuables from his safe and escapes. Before Walsh can disappear, however, Judy kills him. At a hospital, Lori tells Capt. Jensen that she does not know much about Walsh's business. When he tells Lori her mother is in the hallway, the young woman refuses to see her, but when she learns that her mother dropped everything to find her, Lori changes her mind.
Later, Chang and Stevens are back on Hollywood Boulevard looking for prostitutes to arrest. Chang disguises himself as Santa Claus even though it is July, and several prostitutes are amused and proposition him. However, when he announces they are under arrest, they run. He cannot catch them in his costume, and a passerby beats him until Stevens comes to his rescue.