Step Up 2 the Streets is set in Baltimore, Maryland. It follows Andie West (Briana Evigan) as she pursues her big dream of becoming a street dancer. Her mother died of cancer when Andie was 16; she now lives with her mother's best friend, Sarah (her guardian), but in reality, Andie feels like she does not belong anywhere. Although she is doing badly at school, it is her passion for dancing that brings something good into her life. She rehearses regularly with her 'crew', the "410", to keep the title of the illegal competition, 'The Streets'. Sarah is tired of the crime and harassment by the 410 and tells Andie she will have to go to live with her aunt in Texas if she doesn't turn her life around.
Andie's friend and older brother figure Tyler Gage (Channing Tatum) meets her at the dance club, The Dragon. Tyler tries to persuade her to audition for the Maryland School of the Arts (MSA), where Andie has to compete for a place, thinking it will help her life as it did his. When Andie refuses, Tyler decides to battle her for it. In a memorable dance scene, Tyler does great moves and wins the battle. The two head back to her place and Tyler convinces Sarah to let her join MSA. She agrees, and Tyler leaves Andie to auditon at MSA while he goes on tour with Nora, confident that she can make it. Chase Collins (Robert Hoffman) persuades the school director (his brother) Blake (Will Kemp) to recruit Andie after seeing a spectacular performance. When Andie's studies come before the crew, the members are not happy and decide to kick her out. So Andie and Chase form a new crew with help from many people Chase knows at the school, all of whom are not accepted as who they are, including Andie's new friend Moose. Chase has a copied key to the studio and the crew secretly practices their routine late at night when the school is empty. They perform at the local dance club, but are rejected and kicked out. Missy (Andie's friend, played by Danielle Polanco) joins the crew after dropping out of the 410 following the event, as she is disgusted by the crowd's reaction. Missy tells the crew that the only way to enter The Streets is to first do a prank and post it on the Internet to show that the crew is entering the competition. Wanting revenge from being humiliated before, Chase decides for their prank that they are going to make a fool out of Tuck (leader of the 410), as well as leave a dead fish in the vent of Tuck's home.
The crew goes to a family barbecue at Missy's house, and Chase's ex-girlfriend, Sophie, tags along. She begins to develop a crush on Moose after salsa dancing with him.
The 410 doesn't like the fact that they have a new crew to compete with so they warn Andie's group to stay out of The Streets or there will be consequences. When Tuck finds Chase, he assaults him for his prank. Chase comes into school the next day badly bruised and hurt. On top of that, the dance studio has been trashed by the 410 the previous night. Director Collins decides that he will not allow anyone from the school to be involved in illegal competitions. He then decides to expel Andie from MSA because of her involvement with the Streets competition after a tip-off from Sophie. When asked if there were any other students involved, Andie does not tell him about her crew.
When Sarah hears the news of Andie's expulsion, she tells her that she has had enough of her behavior and that Andie now must go to live with her aunt in Texas. Just when Andie is packing her bags to leave for Texas, she receives a text message from Missy that The Streets is on that night - the same night as the MSA fundraiser. Along with Andie, her whole crew gets the text message. They decide to ditch the MSA fundraiser (except for Moose) and instead compete in The Streets. Sarah hears about what Andie did to protect her crew and is proud of her. She allows Andie to compete at The Streets with her crew.
When Collins realizes that his students are missing, he questions Sophie, who tells him where they are. Moose overhears and admits to being part of the crew, taking Collins and Sophie to The Streets just in time for the crew's performance. The director sees them compete and realizes that the street dancing he has been opposing is in fact a legitimate form of artistic expression. He accepts Andie into MSA again.
To Moose's surprise, he gets kissed by Sophie. With Andie's crew being supportive friends and her education now secured, the film finds its optimistic ending - a passionate kiss between Andie and Chase.
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