The story unfolds through the eyes of Danny Vineyard (Edward Furlong), who analyzes Derek's life. The story is told in a first person point of view. It documents fear and hatred as the powerful element emphasized as Derek's (Edward Norton) father is murdered. Derek's father was murdered while on duty as a fireman is a community predominantly filled with gangs. Derek was overwhelmed and consumed with hate soon after their father's death. .
The movie opens with a couple of black guys who are attempting to steal a car. The problem is they are trying to steal the car of one of the most respected members of a local supremacist group, Derek Vinyard. Derek is a perfect member of the black hating group from his skinned head, to the enormous swastika tattooed across his heart. His life is spiraling out of control. When Derek discovers the two black youth's he quickly and unremorsefully takes their lives. Derek is sentenced to three years in prison for brutal murder. Derek's family is torn apart by his own bigotry and self-imposing segregation. While Derek is in prison, his younger brother Danny, takes up where he left off. He joins the group, shaves his head and begins doing book reports on Mein Kampf. He rages for retribution over the murder of his father and despair over the America of his childhood that he sees slipping away. He feels the immigrants are destroying the values of American culture. Danny's teacher, a black guy, wants to help Danny out. The teacher tried to help out Derek, but he just couldn't reach him. Now the teacher thinks he can help Danny. The teacher won't to help him before it gets to late. He gave Danny an assignment to go a report on his brother, Derek. Danny argues with him that he doesn't want to. .
Derek is just now getting out of prison. While Derek was in prison he learned some very valuable lessons while he was in prison and is a changed man. Derek is ashamed of his past and pledging to reform himself.