In Bremerton, Washington, a young orphan named Ignatius spends his days reading the encyclopedia and learning Latin. One day, he ventures out to the public-school yard, where he gets picked on for being an orphan by "the pudge," a pudgy kid. After a brawl, Ignatius beats up "the pudge" severely enough to have the nuns at the orphanage hear about it. At the schoolyard the next day, the pudge — whose real name is Donny — and Ignatius make a truce. They become quick friends.

During one of their first times hanging out, Ignatius takes Donny to see his father in the hospital. Both of his parents were in a car accident; his mother was killed but his father survived. Iganatius's father developed severe psychological issues after the accident. He fed Ignatius nails and went up on the roof of their home and threw bricks at people. After one of these incidences, Ignatius was taken to the orphanage and his father was taken to a psychiatric hospital.

Donny suggests they go see his family, too. Ignatius becomes a regular at Donny's household and one weekend embarks on a backpacking trip with Donny and his father. The trip is filled with camp food, swimming, and scary stories. During the trip, Donny's father tells Donny that he is divorcing Donny's mother. For Ignatius, this signals that everything that seems good is simply a facade. He thinks back to when he snuck into one of the nuns' bedrooms only to find it in extreme disarray. In the middle of the night, Ignatius walks over to the shore of a nearby lake, where he screams "a-men" to the lake. When they hear Ignatius yelling, Donny and Donny's father rush to see what's wrong. When they find Ignatius calm, they all face the lake and echo the word "hey" across the water, creating a chorus of voices saying "hey" back.