Act One

A young student named Smeeton is sitting alone in an empty classroom when boys file in, followed by their Headmaster. Miss Grant, the drama teacher, enters and stands over the boys as they prepare for a test. The boys begin to take the test and answer questions that are asked by the Headmaster ("Daily Chant"). It is clear the boys are not very invested in the test or their academics and when finished, they confess their true feelings ("Doing Things by Numbers").

As the Headmaster and Miss Grant examine the test papers, the new English teacher, Mr. Nicholls, enters. He is introduced to the class, but the Headmaster soon becomes distracted when he notices Smeeton has forgotten to rule off his test. He punishes the boy by making him rule a line a mile long. The Headmaster asks Mr. Nicholls to continue the lesson, asking Miss Grant to show him the book cupboard first. They exit, leaving the boys alone. The students begin teasing Smeeton, and a fight ensues. Nicholls returns and breaks up the fight, enlisting the boys' help to hand out the new books. When the boys realize that they are once again reading Charles Dickens, they begin to complain. Mr. Nicholls tries to summarize the Nicholas Nickleby novel to get the boys interested. Since the story concerns an ill-run boys' school, he asks the boys to consider their lives if they attended the school in the book, instead. They continue to speak out and be difficult, until Mr. Nicholls finally asks them to listen to what he has to say by singing a song ("Here I Am"). Very soon, the boys are enjoying his lesson and join in his song.

The Headmaster and Miss Grant enter and inquire about the commotion in the room. Nicholls explains that they were singing in an effort to help their learning. As the Headmaster starts to show signs of disapproval, Nicholls quickly covers, saying that he would like to make Nicholas Nickleby into a musical and was just about to give out parts. This upsets Miss Grant, who, as the Drama mistress, doesn't find this an adequate use of time. Nicholls, however, tricks the Headmaster into agreeing to the musical by subtly offering him a role. He also assigns Miss Grant the part of his love interest, and the boys insist that Smeeton play Smike ("Stop and Just Think Who You Could Be"). With all of the parts assigned, we shift from modern times to the nineteenth century, where Squeers is in London recruiting pupils for his boarding school. He is concerned, as he has only managed to recruit three boys, so far. By the way that he is treating the boys with him, it is clear that his school is not a happy place.

He is then introduced to Mr. Snawley and his two sons. Mr. Snawley tells Squeers that he wishes to place his sons in school with him; Squeers assures him that he will help these young boys grow to the best of their abilities and soon learns that Snawley is merely their stepfather, looking to send the boys away for some peace ("Youngsters' Interests at Heart"). Snawley is assured that his sons are in good hands and gives over his money. Soon after making the deal, Ralph Nickleby and his nephew, Nicholas Nickleby, a man in his early twenties, arrive to speak to Squeers. Squeers remembers Ralph as a man who paid him to take care of a boy named Dorker, who died at Dotheboys Hall. Ralph makes Squeers an offer. He had read an advertisement that Squeers put in the paper seeking an assistant and suggests that he hire Nicholas. Squeers is hesitant, but Ralph reminds him that he has a lot of information regarding Dorker's suspicious death. Under this pressure, Squeers hires Nicholas.

We move to Dotheboys Hall, where we find Squeers' wife. After a brief flashback concerning the aftermath of Dorker's death, it is clear Mrs. Squeers is just as careless about the boys' well-being as her husband. We return from the flashback, where Squeers arrives from London with Nicholas and the new boys. He calls for Smike, a pathetic little boy who is put in charge of hauling in the luggage. Mrs. Squeers greets the two men, though she obviously dislikes Nicholas. Nicholas also meets the Squeers' spoiled and unruly children, Fanny and Wackford ("Wackford, Fanny, Squeersy and Me").

Nicholas is excited to meet the boys, and Squeers somewhat begrudgingly brings him to the schoolroom. The boys are introduced to Nicholas, who sees that they are clearly mistreated. Mrs. Squeers and Fanny enter with a large jug of beer for Squeers and a small jug of milk for the boys; Squeers boasts that they are doing the best for the boys by depriving them of the luxury of a large meal and nice things ("Dotheboys Hall"). He then demonstrates how the boys are fed their milk and water, which they take in sips from down a line as he calls their number ("Doing Things By Numbers – Reprise").

The Squeers family and Nicholas sit down to dinner, where it starts to become evident that Fanny is taken with Nicholas. Smike serves them the meal and when Nicholas asks about him, Squeers simply says that no one knows where he belongs. When money stopped coming in to pay for Smike's education, he was made a servant to the family. After dinner, Nicholas is told to sleep in their living room until more permanent arrangements can be made. Once they are upstairs, Nicholas overhears Smike huddled at the bottom of the stairs, reflecting on his situation ("Better off the Way I Am"). Nicholas approaches the boy and tries to talk with him; he tries to calm the troubled youth by telling him that there is always hope ("Don't Let Life Get You Down").

Act Two

Smike and the boys rise to prepare for school ("In the Warm Light of a Brand New Day"). One of the boys, Bolder, pretends to be Squeers, and the boys all cheerfully take part in making fun of the Squeers family ("Dotheboys Rock"). The real Squeers enters, quickly stopping the commotion as the boys fearfully fall into line. Mrs. Squeers and Fanny follow with a bottle of Brimstone and molasses, which they prepare to spoon to the boys to help purify their blood. Mrs. Squeers confesses that the brimstone also helps spoil the boys' appetites, making it cheaper to feed them ("Brimstone and Treacle"). Squeers tells the boys that he has seen some of their families while in London. He cheerily gives them reports of late payments, family deaths and retractions of allowance. Finally, Squeers tells Nicholas to take the boys outside and break the ice in the well, so that they can all wash down before classes.

Once Nicholas has led the boys away, Mrs. Squeers tells her husband just how much she hates Nicholas. Squeers tries to calm his wife by telling her that it is quite helpful to have an assistant, but she continues to hate him all the same. We are then led into a fantasy, where Nicholas enters and Mrs. Squeers leads him to a couch. She seems to be somewhat seductive and offers to tell his fortune using cards ("Your Kind of Woman"). She reveals that there will soon be a woman in his life, and that the cards depict that it will be her. Nicholas is hesitant, but Mrs. Squeers continues to seduce him. The fantasy ends abruptly.

The washed boys come for their lessons and sit at their desks. Squeers demonstrates a normal lesson for Nicholas, which consists of inaccurate teaching and household chores. Squeers leaves and asks Nicholas to teach the boys some Latin.

Fanny and her friend, Tilda, enter and watch Nicholas as he teaches. Fanny proclaims that she is in love with Nicholas and that he has asked her to marry him. Tilda finds this rather unbelievable, but Fanny continues to create her own fantasy world ("We'll Find Our Day"). Trying to prove herself, Fanny goes to talk to Nicholas. Tilda comes in and embarrasses her by announcing Fanny's feelings. Nicholas shepherds the boys away for a break. When Tilda leaves, Fanny angrily ruins everything that she can find in the classroom. She then asks Smike to clean up the mess; Squeers enters and assumes that Smike is actually responsible for it. He decides to call the other boys in to watch him beat Smike as a lesson. Nicholas stops this and forces Squeers to release Smike. Nicholas has finally had enough and leads the boys in a riot against the Squeerses ("Here I Am").

We are brought back to the present day, where the classroom is torn-up, just like at Dotheboys. Smeeton organizes a clean-up, so that the boys don't get in trouble. The boys find themselves very happy as they recount the tale of Mr. Nicholas Nickleby, though they are confused when they can't remember who played Squeers, and begin to doubt that the play actually happened. Miss Grant sees the new arrangement and runs off to get the headmaster. The boys, along with a much happier Smeeton, decide that it must have happened ("Don't Let Life Get You Down").

When Miss Grant returns with the Headmaster, she is shocked to find that he likes the new arrangement of desks. The Headmaster has just finished studying Nicholas Nickleby and sees how important it is to give students more freedom. In fact, he is ready to let the boys perform a full-scale production of the play, that they can rehearse during the daily exam time. Miss Grant, too, is slowly won over by his way of thinking. Nicholls reaffirms that all they need to do is believe and they can transform what is bad into good ("Believe").