The film tells the story of two brothers, Derek Vinyard (Norton) and Daniel "Danny" Vinyard (Furlong) of Venice Beach in Los Angeles, California. Both are intelligent and charismatic students. Their father, a firefighter, is murdered by a black drug dealer while trying to extinguish a fire in a South Central neighborhood of Los Angeles, and Derek is drawn into the neo-Nazi movement. Derek brutally kills two black gang members whom he catches in the act of breaking into the truck left to him by his father, and is sentenced to three years in prison for voluntary manslaughter. The story shows how Danny is influenced by his older brother's actions and ideology and how Derek, now radically changed by his experience in incarceration, tries to prevent his brother from going down the same path as he did. The film is told in the style of nonlinear narrative. Wikipedia
Flashbacks throughout the film show Derek's transformation into a vengeful white supremacist in Venice Beach. Having already been influenced by his bigoted firefighter father's latent racism, Derek is driven to action when his father is shot and killed while fighting a fire in a suspected Compton drug den. Eventually Derek becomes second-in-command of a neo-Nazi street gang, The D.O.C., and entices young whites to join. The gang commits acts of intimidation, such as damaging a store owned by a Korean and challenging black players to basketball games to win the court as turf.