As a promising dancer in high school, Sarah Johnson (Julia Stiles) hoped to be admitted to study at Juilliard and invited her mother to attend the audition. Sarah failed in this first attempt, then was horrified to discover that her mother had been involved in a fatal car crash in her haste to arrive at the tryout. Wracked with guilt, the girl gave up ballet entirely.
After her mother's death, Sarah moves in with her estranged father (Terry Kinney). He plays the trumpet in a local Chicago jazz band and lives in a predominantly African American neighborhood. At her new high school, Sarah is one of only a handful of white girls, but is befriended quickly by Chenille (Kerry Washington). Chenille's brother, Derek (Sean Patrick Thomas), is a promising student with dreams of going to Georgetown Medical School.
Chenille invites Sarah to a dance club called STEPPS, where she has her first experience dancing to hip hop rhythms. Derek dedicates himself to helping her develop her talent, as they practice in abandoned warehouses, school classrooms and anywhere they can find. Later they return to the club and amaze others with their dancing, although Derek also sees his ex-girlfriend, Nikki, and engages in a round of "dirty dancing" with her, temporarily putting off Sarah. Little by little, Derek and Sarah become sexually involved. Derek takes a reluctant Sarah to the Joffrey Ballet and afterwards, Sarah confides in him all about her mother and her dreams of Juilliard. Having already achieved his dream of being accepted at Georgetown, Derek convinces her that she needs to do what she wants, and to follow her dreams, but she needs to get back into dance shape.
Back at school, Nikki picks a fight with Sarah. Chenille tells Sarah that she didn't approve of the fight but can understand the bitterness since Sarah, a white girl, is seen as stealing one of the few good black men in the school. Because of this, Sarah breaks up with Derek.
Derek also has a friend named Malakai (Fredro Starr) from whom he has become somewhat estranged. After a drive-by at the basketball court, Malachi wants payback, and needs help. Derek is torn over repaying his friend's past loyalty at the risk of his own college plans.
Scenes of Sarah's audition for Juilliard, in which Derek arrives at a crucial moment to offer encouragement, alternate with scenes of Malakai's shoot-out, in which friends are killed by a rival gang and Malakai is arrested. The film closes as Derek, Sarah, Chenille and their friends join at STEPPS to celebrate Sarah's successful audition.
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