In this sequal to American Graffiti, set over the four consecutive New Year's Eve's from 1964 to 1967 depicts scenes from each of these years, intertwined concurrently with one another as though events happen simultaneously. The audience is protected from confusion by the conceit of a distinct cinematic style for each section.
Northern California, New Years Eve, 1964. John Milner (Paul Le Mat) is now working as a drag racecar driver seeking to win an important match. He gets to meet his old school friends Steve Bolander (Ron Howard) and Laurie Henderson (Cindy Williams) whom are now married and Laurie is nine months pregnant and expecting twins. Terry 'The Toad' Fields (Charles Martin Smith) also turns up having joined the U.S. Marines and whom is with his fiancee Debbie Dunham (Candy Clark). John also meets Carol (Mackenzie Phillips) whom has dropped out of high school and is now a hippie drifting around the country in defiance of her parental rules. While John deals with his manager wanting him to win the upcoming championship after he loses his latest match. But John has other complications when Teensa (Mary Kate Place) a former high school girlfriend, leaves behind a non-English speaking foreign exchange student named Eva (Anna Bjorn) whom is from Iceland and John attempts to woo her despite the language barrier.
South Vietnam, New Years Eve, 1965. (Note: all of these sequences are shot hand-held on grainy super 16 mm film designed to resemble war reporters' footage.) Terry Fields is serving his tour of duty and sets out trying to wound himself so he can get sent home and be reunited with Debbie, but had a lot of bad luck wanting to do so. After an attempt to shoot himself causes an all-out artillery and airstrike against his location, he deals with his commanding officer, the pompous Major Creech, whom is trying to impress a visiting U.S. Senator both of whom appear indifferent to the troop's living conditions and low morale caused by frequent enemy ambushes and harassing attacks. Terry is partnered with Little Joe Young (Bo Hopkins) the former gang leader of the Pharaohs back home whom deal with a naive and newbie helicopter pilot who seems eager for action, but soon realizes the brutality of the war.
San Francisco, California. New Years Eve, 1966. (Note: these sequences echo the movie of Woodstock using split screens and multiple angles of the same event simultaneously on screen.) Free-spirited Debbie "Deb" Dunham has turned from Old Harper to marijuana and has given up her platinum blonde persona for a hippie/groupie and is now living in a commune with several other hippies including Carol whom has renamed herself Rainbow. Deb and her boyfriend, Newt, are pulled over in their car where he gets arrested for marijuana posession by a motorcycle cop whom is former drag racer Bob Falfa (Harrison Ford, in an uncredited cameo). As Deb sets about to get bail for her boyfriend, she embarks on a strange surreal acid-induced journey through the city from the strip club where she formerly worked, to the commune, and to a gun-tooting pimp to get the money. As soon as Deb posts Newt's bail, she, Rainbow, and another hippie, named Moonflower, set out to get access to a strange country-western band whom Deb joins on her mystical journey of self discovery.
Modesto, California, New Years Eve, 1967. Steve and Laurie Bolander deal with their crumbling mariage while Laurie wants to find work to contribute to the family income, the conservative and tradition-minded Steve strongly opposes his wife's choice to find a job since he feels that a woman's place is in the home and to raise their three-year-old twin boys. Laurie angrily flees to the home of a friend who lures her to an anti-war demonstration at a local college campus. Steve sets out to find Lauire and he too gets caught up in the protest which leads into a full-out riot. (Note: these sequences attempt to memorialize the late 1960s with the scenes that recreate the sense and style with references to Haight-Ashbury, the campus peace movement, the beginnings of the modern woman's liberation movement and the accompanying social revolt.) One character burned his draft card triggering the rioting... showing a younger audience what so many Americans had done on the television news ten years before the movie's release. More scenes afterwords show both Steve and Laurie's reactions to the police brutality on the campus demonstrations with billy clubs during the protest.
In 1964, John manages to fix his car for the final race and wins. With the help of a groundskeeper acting as a translator for Eva, he managed to tell her how he feels towards her before she leaves. The segment ends with John driving his trademark yellow Deuce at night along a lonely highway toward another vehicle's headlights, and is never seen going further... hinting that the crash was in that vicinity.
In 1965, when Terry and Joe's chopper is shot down behind enemy lines and Joe ends up dead from a sniper's bullet, Terry and the pilot Lance, are rescued, but Terry becomes alinated with Major Creech who downplays the events to please the visiting Senator. With the help of Lance, Terry fakes his death in a latrine explosion in which he is declared missing in action. In the final scene, Lance meets with Terry who gives him the supplies he needs as Terry sets off to hide out in Europe, free from his war duty (It is never revealed what happened to Terry's fate afterwards if he really did escape from Vietname).
In 1966, Deb finds her boyfriend, Newt, cheating on her with Moonflower and causes a riot at the bar where the country-western band is playing with her as the new lead singer. She escapes from the chaos and decides to leave everything behind to join them on their tour.
In 1967, Steve and Laurie and all their friends are arrested, but Steve manages to overpower the brutal riot officers and comandeers a police bus and leads all of the arrested demonstrators to freedom. As Steve and Laurie walk home in triumph, they celebrate the comming of the new year as all the clocks strike 12.
As with the first American Graffiti movie, the audience is given a last still images of the main cast and what became of them:
-John Milner was killed by a drunk driver in December 1964.
-Terry Fields was reported missing in action near An Loc in December 1965.
-Steve Bolander is an insurance agent in Modesto, California.
-Debbie Dunham is a country western singer living in Oklahoma.