Being a lone young boy in the 'hood" is dangerous and unpleasant. This is what Max experiences when he fools a gang of local toughs who cornered him at school. The gang finds out that the key he gave them is of no value in committing a robbery, and they chase him through the streets of his neighborhood, bent on revenge. He tries to escape by slipping into the open door of an old warehouse, but they follow him there, too. While running from them through aisles filled with all kinds of stuff, he bumps into an old boom box. By doing that, he manages to release Kazaam, a genie who has been held captive for thousands of years. In order to stay free, Kazaam must give Max three wishes.

One of puppet-maker Geppetto's creations comes magically to life. This puppet, Pinocchio, has one major desire and that is to become a real boy someday. In order to accomplish this goal he has to learn to act responsibly. This film shows you the adventures on which he learns valuable lessons.

A new group of students are now making their way through the halls of Bayside High School. Mr. Belding is still the principal, and Screech is now his assistant.