A postal worker falls in love with the Chinese waitress at a Chinese restaurant. They start dating and quickly fall in and out of love, the waitress returning to China. The young man looks for comfort in his father but he's too preoccupied with winning the Eurovision song contest. After listening to loser friends talk about what Sylvester Stallone would do in his situation, the postal worker decides to buy a ticket to China and follow his love to her home.
Ingaló is helping her father on his small fishing boat, but he's an obstinate character and relations between them are tense. After a dance in the village which ends in a fight between the local people and crew of Matthildur ÍS 167, a visiting fishing boat, Ingaló and her younger brother leave home. Ingaló stays briefly in Reykjavík and has a short affair with Vilhjálmur, a man in his thirties. Sveinn has found a job on Matthildur and Ingaló is taken on as a cook. The fishing is poor and when the vessel breaks down it heads for home port, where the crew stays in derelict living quarters for seasonal workers. Ingaló finds out that Matthildur's owner and big wheel in town is none other than Vilhjálmur.
The actress is to produce a play with the local amateur group and old romantic flames are rekindled. At the same time an American army unit is making experiments with a new and powerful energy source in the vicinity, promising the community a prosperous future.