Miss Slovak is training Arnold and Helga for the annual spelling bee. The winner will get $500 prize. Obviously Helga is her favorite ("And Helga, don't spend all that money in one place!").
On the way home Arnold and Gerald are thinking about what one could buy with the money. Arnold is especially enthusiastic about an electronic keyboard — namely the Tonemaster 2000 ("Five octaves, 800 megabytes of music storage and over 250 pre-programmed instruments!"). He is determined to win the contest. Helga, on the contrary, doesn't know what to do---if she wins, that means Arnold loses, but if she loses, she'll be letting down her dad (either way, it's a lose-lose situation for her).
Arnold starts to study in his room. Meanwhile, Helga's father Bob is watching his new beeper-commercial in which he promises every customer a free beeper if Helga loses at the spelling bee. Helga is getting drowsy from studying and wants to sleep, but Bob forces her to continue studying. To motivate his daughter, Bob shows her all the trophies in the trophy room Olga has won — including the one she won at the spelling bee, of course. For the 2000th time Bob tells Helga the story how Olga spelled every single word right, including the very last one: "qualm". Starting with that trophy, more and more filled the room until it was nearly full. However, Bob has left a tiny bit of space for Helga's spelling bee trophy.
When Arnold arrives at the Civic Auditorium with his grandparents, Gerald has already been waiting for him. Meanwhile Bob lectures Helga behind the stage about every other child being a loser and that she needs to win no matter what because she is a Pataki. Much to Helga's dismay, Bob wants her to wear one of Olga's medals around her neck as a lucky charm. The medal is so heavy that she can barely walk. The contest begins and all the kids are failing one after the other---except for Arnold, Helga and a boy named Seymour Stump. When Helga almost fails with the word "velocipede" Bob decides to try a little "insurance". As Bob walks out of the auditorium, Seymour is given the word "Pasquinade". Gerald says no kid can spell that, but Seymour manages to spell it correctly, puzzling Gerald and even the moderator. Seymour bows as the audience applauds him. But as he does, something falls from his left ear: a microphone, revealing that he had been cheating. His mother, who is in a van outside asks him if he had gotten his latest word right. The moderator picks up the microphone and Seymour is disqualified. As Seymour is being escorted off the stage against his protests, Bob pulls Arnold aside. He tries to bribe Arnold with a check for $500, the same amount as the prize money into losing on purpose, but Arnold ultimately decides not to accept the bribe. His next word is "onomatopoeia", which was one of the tough words he remembers studying and spells it correctly. While the audience is cheering for Arnold, Helga discovers the check on the floor and is disappointed that Bob didn't trust her to win on her own---she then decides to lose intentionally. Her next word is "qualm", which was also Olga's, but Helga spells it with an "X" instead of an "M". Arnold wins the spelling bee, the $500 and the trophy, which proves to be so big that Gerald needs to help him carrying it.
While Arnold's celebrating, Bob flees from a wild horde of customers demanding their free beepers. Helga's happy for Arnold, and she's also happy to have gotten back at her dad for his lack of trust in her abilities.