The three Baudelaire orphans, Violet, Klaus and little Sunny, arrive at the Prufrock Preparatory School, only to be met by the unpleasant bully, Carmelita Spats. The children must to the Orphan's Shack where fungus grows from the ceiling and territorial crabs scuttle over the floor. Vice Principal Nero demands that the whole school attends his six-hour violin recitals every evening, or every child must give him a bag of candy. He employs Sunny as his secretary while the other Baudelaires are sent to awful classes, listening to dull stories or endlessly measuring household items. But there's a surprising island of happiness for the Baudelaires, they met Isadora and Duncan, the two remaining siblings of the Quagmire triplets who also have large fortune after their parents too died in a terrible fire. The happiness doesn't last long, however. Count Olaf returns in the guise of the new gym teacher, Coach Genghis. Under his evil eye, the orphans are forced to run through the night, as well as taking part in their day-time classes. Desperately thinking of a plan to escape from Count Olaf, the Quagmires offer to stand in for the Baudelaires on their night-time running laps, using a bag of flour in place of Sunny. But Count Olaf kidnaps the Quagmires instead, hoping to steal their fortune as well as the Baudelaires', and Violet, Klaus and Sunny are left with the cryptic final message from Duncan - the letters V. F. D. - and the horrible knowledge their new friends are in the unpleasant clutches of Count Olaf.