The managers work under the tyrannical Kongstrup, who has a history of affairs with women employees, and resulting illegitimate children. Among such children is Rud, who befriends Pelle and helps him learn Danish. Eventually, Pelle becomes more confident, and begins going to school, though he is still discriminated against as a foreigner. Pelle also befriends the Swedish worker Erik, who is constantly harassed for alleged sloth. Erik shares his dream of visiting America, China and "Negroland" with Pelle, to "conquer" the world. Rud runs away after poor performance at school, but Pelle begins to do well.