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The movie is set in the coal mining region of England in 1986. The coal miners are on strike.

Billy Elliot is a young 11 year old boy that lives with his father, older brother and grandmother. His mother had died a few years earlier. The father and brother both work in the coalmines and are participating in the strike.

Billy is taking boxing lessons at the local gym that is also used by a ballet school. His boxing skills are terrible and he is very interested in the ballet. He finally gives up boxing and starts participating in the ballet without his father knowing.

His brother is very vocal and active in the strike and even is involved in the vandalizing company property.

His father finds out about Billy's ballet and doesn't want him dancing. Julia Walters is Billy's teacher and she thinks he's good enough to audition for the Royal Ballet school but of course his father is against it.

Around Christmas, Billy is at the gym with his gay friend, showing him his dance routine. His father, along with his father's drinking buddies, sees Billy dancing and Billy's friend wearing a tutu. Billy does a dance routine for his father to show him that he's actually a pretty good dancer. His father sends Billy home. At first you think his father is furious with Billy but in reality he was so impressed with his sons dancing that he realizes that this may be Billy's way out of the coal-mining life.

Billy's father wants to get the money to send Billy to the Royal Ballet so he crosses the picket lines and becomes a scab for the coal mining company. His son sees him crossing the line and pleads with him not to go through with it and the father agrees.

The father sells his deceased wife's jewelry and gets enough money for he and Billy to go to London for the audition.

They take a bus into London and go to the Royal Ballet School where his father is just overwhelmed by the whole thing. Billy's audition does not go well. After his routine, he goes back to the locker room and gets into a fight with another auditioning student.

Billy is brought back before the board, they ask him a few questions, and they aren't impressed with his answers. They thank him and tell him that he will hear from them. They even talk to Billy's father and he says he hopes that Billy is accepted so he can get out of the terrible conditions they have in the coalfields.
Just before they leave the room, one of the board members asks Billy a final question…
"Why do you like to dance?"
Billy answers that he starts out slowly but once he gets going, it's like there is a fire inside him, like lightning and he can't remember anything other than the dance. This is just what the board wanted to hear.

When Billy and his dad get home, they hear that the coal strike is settled and the miners are going back to work.

Eventually Billy gets a letter from the school telling him he's been accepted. There's a scene with his father and brother taking him to the bus wishing him well. In fact, the entire town is proud of him.

The bus drives off and the next scene takes place quite a few years later (probably 10-15 years).

We see the father and brother sitting in a concert hall. Next to them is Billy's gay friend, now dressed as a woman. They are all waiting for Billy's performance. The music starts, Billy comes on stage and we see him make one leap, the picture freezes and the movie ends…

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Billy's dance teacher decides that Billy is good enough to dance in the Royal Ballet in London.
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