In Beverly Hills, California, three close friends have big plans for the future upon their high school graduation. Passive, straight-laced Clay Easton and his girl friend, Blair, plan to attend an Ivy League university while Clay’s best friend, outgoing partier Julian Wells, plans to start his own record label, Tone Deaf Records. However, by the end of the summer, Blair’s modeling career is revving up and she opts not to go to college, while Julian’s record deal is falling apart. When Clay comes home for Thanksgiving, he catches Blair and Julian in bed together. During Christmas break, Clay is reluctant to go home from college, but receives a call from Blair saying she needs him. In Los Angeles, Clay goes to a lavish “Think Pink” Christmas party where he runs into Rip, a drug dealer who offers him a vial of cocaine. Clay turns it down, but Rip comments, “Old habits never die, they just hibernate.” Clay greets Blair with a kiss, but she is uncomfortable around him and reports that Julian is in trouble. After he leaves, Blair snorts cocaine. When Julian and Clay meet, Julian asks if Clay is still angry about his sleeping with Blair. Clay says, “No,” but Julian calls him a liar. Clay, Blair, and Julian leave the party and go for a joyride in Clay’s vintage red Corvette convertible. At a restaurant, Julian announces that he is about to buy the popular Panic Club nightclub in downtown Los Angeles. Blair takes Clay aside to explain that when Julian lost his money in the failed record deal, he borrowed money from his family, but still could not make the deal work. After that, Julian spent most of his time getting high on drugs because he could not face his father. The three go to another party where Rip confronts Julian, wanting the $50,000 Julian owes him. Julian promises to give Rip the money once his deal for the Panic Club goes through, but in the meantime, he wants Rip to front him a gram of cocaine. Rip gives Julian the drug. Blair apologizes for sleeping with Julian, but Clay says it does not matter anymore. Blair explains that when Clay left for college, Julian needed someone and she needed someone, so the two of them got together. Now, however, Blair needs Clay’s help dealing with Julian’s drug addiction. The next day, Clay goes to observe one of Blair’s modeling shoots and finds her doing lines of cocaine in her dressing room. Blair insists she can stop doing the drug any time, and that Julian is the one who has a drug problem. Julian goes to visit his uncle, Robert “Bob” Wells, asking to borrow $15,000 to take over the Panic Club. Uncle Bob agrees to go look at the place. Clay sees Blair at a nightclub. They start kissing and leave the club together, making out while he drives. They return to her loft apartment and have sex. The next morning, Clay asks Blair to return to college with him when he leaves in a week. Later, Bill, one of Rip’s men, comes to Blair’s apartment looking for Julian. Meanwhile, Julian breaks into his family home and sets off the burglar alarm. His father, Benjamin Wells, tells him to leave or he will call the police. Clay and Blair search for Julian and find him sleeping on the rocks near the shore at Zuma Beach. Julian attempts to apologize to Clay, saying that Blair was there for him when he needed someone. He reports the sex was good, but it was not love. On Christmas Eve, Julian takes his Uncle Bob to see the Panic Club, but Bob reports that he cannot give him the money, explaining that Julian’s father advised against it. Soon after, Julian goes to a friend’s house and smokes crack cocaine. Rip comes to the house demanding his money. When Julian reports he does not have the money and has no idea where he will get it, Rip suggests that Julian can work for him as a male prostitute. Rip has Bill take Julian to a seedy motel, where he performs sexual services on a man. Afterward, when Bill tells Julian that they have two more people to service before the night is over, Julian panics and runs away. At the Easton family Christmas Eve dinner, Clay and Blair sneak out and have sex in the breezeway. Later, Clay finds Julian hiding at the swimming pool. When Julian asks for $50,000 to pay off his drug debt, Clay says he does not have that much money, but goes to ask his father for it. Julian sneaks inside Clay’s house and steals his mother’s jewelry. Clay and Blair look for Julian at nightclubs around town, but cannot find him. When Blair snorts cocaine offered to her, Clay says she is “a mess.” They return to Blair’s loft and discover Julian there, physically ill from drug withdrawal. Clay and Blair nurse him, while Blair explains she has helped Julian through withdrawal many times in recent months. The next morning, Christmas Day, Clay tells Rip he will find a way to pay Julian’s drug debt, even if it means selling his sports car. Meanwhile, Julian goes to beg his father to let him stay at home for a night, but his father refuses, reminding him of all the damage he has already done to the family with his lies and stealing. His father promises that if Julian can stay off drugs for a week, then he will do everything he can to help him. Blair and Clay return to her apartment and find it trashed by Rip’s men. They also find a message from Julian on her answering machine saying he is going to Palm Springs, California, to confront Rip. In Palm Springs, Rip tells Julian he is a “junkie” and cannot quit drugs, so it is best for Julian to continue to pay off his debt via prostitution. Bill gives Julian some crack cocaine to smoke, then takes him to service some men at a party. Clay learns where Julian is and breaks into the party, dragging his friend away. Meanwhile, someone offers Blair cocaine, but she dumps it down the drain. Clay gets into a fistfight with Rip, telling him to leave Julian alone. Clay, Blair and Julian drive away in his red convertible, but as they ride through the desert, Julian’s heart stops and he dies in the car. After the funeral, Clay asks Blair to return with him to college on the East Coast and she accepts.