Director Ted Brooks and comedians Jack Norcross, Dandy Joslyn and Phil Miller are part of a troupe of promising young players rehearsing for a WPA show at the Garrick Theater in New York and are stunned when the government withdraws their funding on the day of the show's dress rehearsal. Destitute, the troupe plans to return home when Mac, the stage doorman, offers to allow four of the men, Phil, Dandy, Jack and Ted, to use the theater for a boardinghouse. After accepting Mac's offer, the men improvise bedrooms out of the set pieces and meet amateur actress Lorie Fenton from Cleveland, who is eager to audition for them. When the men learn she recently received a small inheritance, they allow her to audition, hoping she will back the show. Although she has already spent her $300 inheritance to get to New York, the men allow her to stay and build her a bedroom. Dandy and Phil's girl friends, Polly Adams and Dolly Stewart, who were to star in the show, have found work as burlesque dancers. One night, while Dandy and Phil are at the burlesque show, Ted and Lorie sing a duet at the theater and fall in love. They then find an envelope filled with fifty dollar bills in a piano in the manager's office. Lorie runs out to break one of the bills at a bank to buy groceries, unaware that the money was hidden by Phil, who is on parole. Phil had met an old friend on the street who asked him to get rid of an envelope of counterfeit money for him. Upon returning to the theater, Lorie learns that the bills are fake and the police arrest a gang of counterfeiters across the alley. When Mac informs them that the Garrick is going to be torn down unless the owner, L. L. Bancroft, finds a new tenant, the troupe decides to give him half the money as a retainer. Bancroft also insists that his wealthy and well-connected girl friend, Doris Marlowe, be given a part in the show. She turns out to be a beautiful and talented young woman, who manages to fill half of the house with her rich acquaintances. Meanwhile, the banker, Freeman Taylor, has discovered that the bill is phony and, recognizing Lorie's picture in the paper, buys a seat for opening night. At intermission, Taylor, accompanied by a man from the Treasury Department, tries to have Lorie arrested, but agrees to let her finish the show. Meanwhile, Bancroft, nervous that his cash-laden safe is filled with counterfeit money, asks the inspector to accompany him to his office. Phil beats them there, however, and after cracking the safe, replaces the fake money with box office receipts. Back at the theater, he arranges for a piece of scenery to fall on Taylor, and in the confusion, Dolly removes the phony bill from his pocket and replaces it with a real one, thus humiliating Taylor. Phil burns the counterfeit money while Bancroft offers Ted $39,000 for forty-nine percent of the show. Ted and Lorie and the chorus then complete the show's finale, "Dancing on a Dime."