Abbey Grove's new term kicks off with the annual swimming gala and headmaster Mr Fraser decides to end this year's gala with a synchronised diving competition.
Alfie is shocked by the arrival of new teacher Mr Schwimer at Abbey Grove and even more shocked to learn that he will be taking over Alfie's own class.
Abbey Grove is rocked by the news that deputy headmistress Ms Pickwell is dead and Alfie is left particularly on edge when her suicide note clearly lays the finger of blame on him after one of his class's pranks pushes her over the edge.
It is Valentine's Day and headmaster Mr Fraser has planned a special Abbey Grove `Take Me Out' to help the shy kids find love, and a new deputy headmistress Professor Green is rubbing everyone up the wrong way, apart from Alfie's father, who happened to go to teacher training college with her.
Headmaster Mr Fraser has organised a special guest speaker for Drugs Awareness Day, much to Ms Gulliver's annoyance, and Alfie's class is alarmed by the news that Stephen's parents want him to leave Abbey Grove.
Abbey Grove is plunged into financial ruin when headmaster Mr Fraser gives the Nigerian Minister of Finance all their money with the promise of huge returns on the investment.
It is time for the Abbey Grove Christmas play and with Ms Pickwell no longer around Mr Fraser decides Alfie is the obvious replacement to direct this year's production, but the class is undecided about whether to put on the Nutcracker or Robocop.