The tale is set in New York City in the present day of the film’s release, evidently the 1980s. Oliver, an orange kitten, is lost in the streets. He is hungry and tries to steal some hot dogs from a hot dog seller, but without success. A streetwise, wise-talking mongrel – judging from appearances, some sort of Terrier crossbreed – named Dodger offers his help. Together they are successful, but Dodger runs off, attempting to leave the orphaned feline behind. He is mildly dumfounded when Oliver overcomes him, attempting to take his half of the meal, but continues to evade the pursuing kitten with relative ease, showing off his street skills in the process while singing the song “Why Should I Worry?”.

Dodger eventually arrives at the barge of his owner, a pickpocket by the name of Fagin, along with his meal, to give to his friends: Tito the fiery Chihuahua, Einstein the ironically-named Great Dane, Rita the Saluki and the ever-serious Francis (Frankie), the Bulldog. No sooner does Oliver sneak into their home, located below the city’s docks, than the dogs get into a fit of fighting and confusion over their visitor. Breaking it up is Fagin himself although he also has to deal with Einstein licking his face with a huge slobbery tongue and the rest of the dogs jumping on him because he came in with a box of doggie treats. Fagin followed in to see what goods the dogs have stolen during the day for them to hold out. He’s terrified to discover that the dogs have returned with some worthless trinkets. He informs them that he is running out of time to repay the money he borrowed from Sykes, a ruthless shipyard agent and loan shark. When Sykes arrives, he mails in his two savage Doberman Pinschers, Roscoe and Desoto to fetch Fagin. Going out on a long quay, he sees Sykes waiting in his car, a Lincoln Continental Mark IV with a license plate reading “DOBRMAN”. Sykes outlines his conditions: the money must equal paid in three days, or else. Fagin knows that he can’t find the money, and that he is in a lot of trouble. During this scene, Roscoe flirts with Rita as Desoto finds and attacks Oliver, who scratches his nose. Dodger and his gang defend Oliver and the two Dobermans leave when Fagin arrives. Admiring Oliver’s courage with DeSoto, Fagin welcomes the kitten into the gang.