Plot

Two World War II veterans return from overseas--one of them having smuggled into the country a French orphan girl he has become attached to. They wind up running into their old sergeant--who hates them--and getting involved with a race-car builder who's trying to find backers for a new midget racer he's building.

In this sequel to 'Buck Privates', after serving in Europe during World War II, Herbie Brown (Lou Costello) and Slicker Smith (Bud Abbott) return to the United States aboard a troop ship. Also on board is their old boot camp sergeant, Collins (Nat Pendleton). As the ship nears New York, Collins and his superiors search the men's belongings for contraband. A six-year old French orphan, Evey (Beverly Simmons), whom Herbie and Slicker befriended in France, is found in Herbie's duffle bag. She is handed over to Lieutenant Sylvia Hunter (Joan Fulton) who delivers her to immigration officials in New York. However, during a shift change at the office, Evey is mistaken for a neighborhood kid and set free.

Meanwhile, Herbie and Slicker are back to their pre-war occupation of peddling ties in Times Square. Collins is back at his old job as well, as a police officer assigned to the same beat. He is about to arrest the boys when Evey shows up and helps them escape.

Herbie and Slicker attempt to adopt Evey, but are told that one of them must be married and have a steady income. Evey suggests that Herbie marry Sylvia. They show up at her apartment, but learn that Sylvia already has a boyfriend, Bill Gregory (Tom Brown).

At one point, Herbie and Slicker purchase what seems to be an ideal home for $750, but the seller doesn't want to let them see the interior prior to purchase. Before Herbie can get the front door open, the seller gives a signal, and a truck hauls off the façade, revealing that the boys had just purchased a broken down old bus. The two have to fix it up to use as a home.

Bill is a midget car racer. He is sure he will win the $20,000 prize at the Gold Cup Stakes, but his car is being held at a local garage until past due bills are paid. Herbie and Slicker use their separation pay and loans from their old service pals to get the car out of hock. Collins, however, has other plans. He had been demoted repeatedly to ever less desirable beats thanks to the boys' escaping from him. He stakes out the garage in hopes of catching them and returning Evey to the immigration authorities to get himself back in good favor with his boss. He eventually chases them to the track, where Herbie gets in Bill's race car and leads everyone on a wild chase through the streets of New York.

Herbie is eventually caught, but not before the head of an automobile company is impressed enough to order twenty cars and 200 engines. With his financial future secure, Bill can now marry Sylvia and adopt Evey. Slicker and Herbie will be allowed to visit Evey if they get jobs. Collins' captain suggests that they join the police force, which they do...with Collins as their instructor!