Count Olaf hatches another evil plan, this time disguised as Coach Genghis at the orphans' new residence, Prufrock Preparatory School. The siblings play along with his plan, even as he forces them to run laps each night so that they'll flunk out of school.
Even with Olaf's craftiness, the Baudelaire children manage to make friends, Duncan and Isadora Quagmire, similarly precocious triplets whose parents and sibling died in a fire. Their new friends pretend to be them and do laps with Olaf, giving the Baudelaires time to study for their exams. Things don't pan out as planned — the Baudelaire children get expelled and Count Olaf kidnaps the Quagmires, who quickly tell their new friends to look into the elusive "V.F.D."