After learning that Punky did not do her book report, Henry cancels Punky's plans to see her favorite singing group DeBarge in concert, a move that Punky vows to never forgive Henry for -- until Henry gets DeBarge to come to the apartment and tell Punky how important reading is.

Punky decides to write a gossip column in the school newspaper, and she soon finds herself in hot water with her teacher, her schoolmates, and Henry when the gossip column does nothing but cause problems, especially when Punky's column tells her teacher, Mrs. Winston, which class put a frog in Mrs. Winston's briefcase. Mrs. Winston thought it was her biology class, but it was her history class.

Overweight classmate Farley "Spud" Blugner has a crush on Punky, but rejection from Punky sends him out on the window ledge on the 6th floor of the apartment building Spud lives in, when Punky refuses to ask Spud to the Sadie Hawkins Day dance.