The movie begins with Alvin having nightmares of meeting the Werewolf, leading to him wake up screaming in fear. Simon and Dave conclude that Alvin's been watching too many horror films at night. Alvin says that it is because their new neighbor, Lawrence Talbot, creeps him out and speculates that he is hiding something. Theodore is having trouble with Nathan, a bully, and will not go to the principal, who plans to retire due to Alvin's daily mishaps, for help. However, Alvin sticks up for him.