One day, 11-year old Milton Fauster and his 13-year old sister Marlo are in the Grizzly Mall of Generica, Kansas. They go into a store where Marlo shoplifts some lip gloss, which she surreptitiously stashes in Milton's backpack without his knowledge. A mall security officer spots this, and tries to accost the two.
As Marlo and Milton are running through the mall with the security guard chasing them, Milton realizes Marlo tricked him into being an accomplice. Pausing for a moment in front of a giant marshmallow statue of a Grizzly Bear, and Milton spots Damian Ruffino, his extremely unhygienic tormentor, school bully, and all -around delinquent, sticking dynamite in the marshmallow grizzly's behind.
Before the mall security guards can catch up with them, the marshmallow grizzly bear explodes prematurely, and Milton, Marlo, and Damian all die. The last thing they see is flaming marshmallow all over the mall. The next thing they know, Milton and Marlo are holding hands and plummeting downward and Milton feels a slight sting. When he and Marlo land, they find themselves in Limbo, the waiting area for the Nine Circles of Heck, which include Rapacia, Blimpo, Fibble, Snivel, Precocia, Lipptor (Wise Acres), Sadia, and Dupli-City. Because of her sins (e.g., the shoplifting) Marlo has been sent to a sort of "lite" version of Hell reserved for bad kids, called "Heck"; Milton, apparently, has been judged guilty by association and sent there with his sister.
Processed through the afterlife's terrible bureaucracy, Marlo and Milton are conveyed to a nightmare of a school in Heck, presided over by principal Bea "Elsa" Bubb, who torments her charges with pretty much the worse things they can imagine in a school. Milton and Marlo are separated and Milton meets Virgil, who befriends him, and the two plot an escape from heck and return to Earth and the land of the living. But Damien, who has been bad enough that he has started to rise in the hierarchy of Heck, is sent after them and foils their plans, landing them back in Heck. Marlo, meanwhile, has been causing her own brand of chaos by organizing a resistance among the girls in the heckish school, causing Principal Bubb to decide that the Fauster siblings are problem children. She decides to deal with them by sending them to the next lower circle of Heck: Rapacia.