Danny Vinyard (Edward Furlong) is a budding racist
skinhead and a student at
Venice Beach High School, Venice Beach, Calif. He receives an assignment from his history teacher, Murray (Elliott Gould), to write a paper on "any book which relates to the struggle for human rights." Knowing Murray is Jewish, Danny writes his paper on
Hitler's
Mein Kampf, Murray attempts to get Danny expelled for doing this; principal Dr. Bob Sweeney (Avery Brooks) refuses, instead informing Danny that he would study history under Sweeney, studying current events. The class would be called "American History X." Danny's first assignment was to prepare a paper on his brother Derek (Edward Norton Jr.), a skinhead leader who had just been released from prison after serving three years for manslaughter. Danny is further warned that failing to submit the paper the next morning would result in his expulsion.
The rest of the movie is a series of vignettes from Danny and Derek's shared past.
Derek is the son of Dennis Vinyard (William Russ), a firefighter who displays racist tendencies in a vignette of his reaction to the news that Derek's English teacher, Dr. Sweeney, has assigned
Richard Wright's
Native Son. Sent on a call to fight a fire in a drug den, Dennis is murdered by black drug dealers. In a television interview conducted after Dennis' death, Derek erupts in a long racist tirade. Shortly thereafter, racist Cameron Alexander (Stacy Keach) recruits Derek and together they form a skinhead gang called the D.O.C. The definition of "D.O.C." is never explained, but Danny, who was recruited to the D.O.C. in Derek's absence, makes an amateur video in which he explains he hates "anyone who isn't white Protestant."
An expert basketball player, Derek is reluctantly dragged into a 3-on-3 game, which he won, against three members of the
Crips in which the prize was control of the recreation center basketball courts the D.O.C. used. That night, his mother Doris (Beverly D'Angelo) invites Murray, who she is dating, home for dinner. Derek screams at Murray, who breaks up with Doris that night and leaves. Doris orders Derek out of her home. That night, as Derek has sex with his girlfriend Stacey (Fairuza Balk), Danny hears the three Crips Derek beat at basketball attempting to steal Derek's truck. Derek grabs a pistol and heads outside. He shoots one Crip to death and curb stomps another. Immediately arrested, he is sentenced to three years at the
California Institution for Men in
Chino.
Derek is given a job in the prison laundry. He is assigned to be the partner of Lamont (Guy Torry), who proclaims himself to be the most dangerous man in Chino because he controls the underwear. Lamont is serving six years for assault; he stole a television set from a store "right next to a donut shop" and broke the arresting officer's foot when he accidentally dropped the television on it. Lamont is also a serious basketball fan and the pair develop a rapport.
In the prison, he joins the
Aryan Brotherhood. After about a year, he becomes disillusioned with the gang, especially over the group's friendly dealings with a Mexican prison gang member, and their trafficking in narcotics. His objections are rejected by the other white supremacists. His fellow neo-Nazis savagely beat and rape him in the shower.
While recovering from the attack, Derek is visited by his black former high school English teacher, Dr. Bob Sweeney (Brooks), whom he asks for help to be paroled. Sweeney informs him of Danny's continued involvement with neo-Nazis, and that he is on the same path as his older brother. Sweeney then confides in Derek that he hated white people as a youth, but he eventually realized that hatred is pointless. This proves a turning point for Derek, who further distances himself from the Aryan Brotherhood and changes his outlook on life. He spends the remainder of his time in prison alone, reading books that Sweeney sends him. He fears that the prison's inmates will attack him, but they leave him alone, thanks to Lamont's persuasion. Finally realizing the error of his ways, Derek leaves prison a changed man.
In the evening, when Derek returns home, he finds that Danny has a D.O.C. tattoo and then tries to persuade him to leave the gang. Later that night, at a neo-Nazi party which Derek and Danny are both attending, Derek confronts and tells the leader, Cameron Alexander, that he and Danny will no longer associate with them. Alexander provokes Derek, who beats him up. During an ensuing confrontation, Danny's neo-Nazi friend Seth Ryan (Suplee) runs after Derek and aims a pistol at him, which Derek wrestles from him, and points at the angry crowd before running away from the party. Danny angrily confronts Derek, who tells him about his time and transformation in prison; the confession seems to prompt a change in Danny. Back at their home they remove all the
white power posters from their bedroom walls. Derek then takes a shower and reflects somberly on his numerous white power tattoos in the bathroom mirror.
The following morning Danny finishes his paper, and Derek gets ready for a meeting with his parole officer. Derek walks Danny to school before his meeting, and on their way they stop at a diner where they are met by Sweeney and a police officer. They tell Derek that Alexander and Seth were attacked the previous night and have been hospitalized. Derek claims no knowledge of the incidents, yet they ask him for help. Derek reluctantly agrees.
At school, Danny is confronted by a young black student named Little Henry, with whom he had a confrontation the previous day. Little Henry pulls out a gun and shoots Danny in the chest, killing him. When Derek arrives at the school, he runs into the bathroom and tearfully cradles his dead brother in his arms.
