Sid pretends that Arnold's room is his room when he studies with Lorenzo, a rich classmate.
Mr. Simmons tells the children to choose partners for the history project. Sid asks Lorenzo whether he will work with him. Lorenzo agrees and suggests them to write a paper about the Apollo space program. Sid thinks it's a good idea. Lorenzo invites Sid to his house that afternoon, so they could start their project. Sid is the first kid to be invited to Lorenzo's mansion.
Once arrived, Sid spends time playing with Lorenzo's toys, while Lorenzo is working on the project. Lorenzo suggest to meet at Sid's house the next day. Sid is terrified by the idea, because he's ashamed of his small, run-down room. So, he asks Arnold whether he can borrow his room for an hour.
In Arnold's room, Sid replaced all the photos with his own, and hangs a doorplate "Sid's Room". Sid tries to impress Lorenzo with Arnold's high-tech equipment, but confuses the options of the remote control, turns on too loud the music and makes the sofa to hide into the wall. Lorenzo tries to put the CD into Arnold's computer, but it's password-protected, and Sid tries to find a password until it's too late, and Lorenzo has to go home. Lorenzo says they will meet at his house next day.
Sid is at his home, when Lorenzo calls him and says he's on his way to Sid, i.e. to Arnold's room. Sid quickly calls Arnold and tells that he has to borrow his room again, and then runs to Arnold's. Sid barely manages to replace all the pictures again when Lorenzo arrives. Grandpa appears, he asks where is Arnold, but Sid chucks him out and invites some excuses for Lorenzo. Lorenzo begins to work at the computer, but Sid interrupts him, telling that he has to go home. Lorenzo finds Arnold's secret diary, Arnold's alarm clock suddenly starts to repeat "Hey Arnold!", and Sid fakes headache to get rid of Lorenzo sooner. Sid sends Lorenzo away through the skylight, because Arnold is waiting at the door. Just when Lorenzo is out, Arnold comes it to speak to Sid. Sid confesses the whole story. Arnold advises to tell Lorenzo the truth, but Sid refuses.
The next evening at Lorenzo's, Sid and Lorenzo are working on the project, Lorenzo remembers he left his CD in Sid's, i.e. Arnold's computer. Before even Sid can protest, the two sit into Lorenzo's car and speed to the boarding house. Lorenzo storms up the stairs, with Sid close behind him. When they enter the room, there are Arnold, Gerald, Harold, and Stinky there, playing cards. Arnold is not going to lie to Lorenzo, and the truth comes out.
At first Lorenzo is angry that Sid lied to him, but then forgives him, and they join the card game.