The film begins with main character Jimmy "B-Rabbit aka Bunny Rabbit" Smith, Jr. at a local rap battle MCd by Smith's friend David "Future" Porter. A nervous Rabbit chokes at the mic and exits the competition.
After the initial scene at the music event, the movie focuses on Jimmy, a young and depressed sheet metal factory worker who is struggling with different aspects of his life. He has moved back north of 8 Mile to the rundown trailer home in Warren of his alcoholic mother Stephanie (Kim Basinger), his sister Lily (Chloe Greenfield), and his mother's abusive live-in boyfriend Greg (Michael Shannon). Jimmy is focused on getting his music career started, but he seems unable to catch a break. Just prior to the events of the film, he ends a relationship with his girlfriend Janeane (Taryn Manning), and during the film, begins a new relationship with Alex (Brittany Murphy).
As the film progresses, Jimmy comes to realize that his life has remained largely the same since he graduated high school. At first, he considers himself a victim of his circumstances and blames others for his problems. Over time, though, Jimmy begins to take responsibility for the direction of his life and realizes that he has a large degree of control over how it will go. He begins to question whether his group of friends, including Future, are holding themselves back from moving on to bigger things. "All we ever do is talk shit," he tells them, as they bicker about the best way to become successful in the music business. With his onstage choke still fresh in his mind, he appears to decide that he will give up on or postpone his dream of a music career in favor of devoting more time to his day job and building a home life. Jimmy's newfound responsibility becomes evident to his supervisor at the factory as well. At the beginning of the film, when Jimmy requests extra shifts, his supervisor laughs at him (he's usually late to work), but by the end, Jimmy's improved attitude and performance earn him the extra work he had wanted. However, a late night shift conflicts with the next battle tournament. Jimmy initially doesn't want to go, but a visit from Alex changes his mind. Paul, a homosexual co-worker whom Jimmy stood up for earlier in the film during a rap battle, agrees to cover for him.
Rabbit's friends hail him throughout the film as an incredible rapper, but until this point the film only shows snippets of his skills. The tournament has three rounds, and in each of them Rabbit faces a member of the "Leaders of the Free World", a group that feuds with Rabbit and his friends throughout the film. Rabbit wins both of the first two rounds with progressively more impressive freestyle raps. In the last round, he is paired against Papa Doc, the tournament's most feared battler and Jimmy's main antagonist throughout the storyline. Rabbit is aware that Doc knows all his weak points, so he decides to address them preemptively with his freestyle. Rabbit acknowledges without shame his white trash roots and the various humiliations the Free World clique have inflicted on him, stating that despite it all, he's still standing in this battle - a bold move essentially stripping any opponent, Doc specifically, of all ammunition against him. He then uses the difficult life he's had as a springboard to reveal the truth about Papa Doc: despite passing himself off as a thug, he has a privileged background. Doc, whose real name is Clarence, attended Cranbrook, a private school located in upper class Bloomfield Hills, and lived all his life in a stable two-parent household. Rabbit makes a reference to "Shook Ones Pt. II", the beat that the DJ is spinning, by calling Papa Doc a "halfway crook", which sends the crowd into a frenzy. Doc is left with nothing to say in rebuttal, drops the mic, and Rabbit takes the title. As Rabbit leaves the venue, Future suggests that he stay and celebrate his victory while also offering a position that would allow him to host battles at the shelter. Rabbit refuses, claiming he has to get back to work and do everything his own way, to which Future agrees. The final shot displays Rabbit walking away from the shelter, more confident of the future that lays before him.
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