The Baudelaire children (Violet the inventor, Klaus the scholar, and Sunny the biter) walk with Mr. Poe to their new home on 667 Dark Avenue. It is very dark, due to the fact that there are giant trees blocking out sunlight. This is apparently because "light" is out of fashion, while "dark" is in. The children and Mr. Poe find their way through the gloom with help from the doorman. Mr. Poe does not go with them to meet their new guardians, because he is leaving on an expedition to find the Quagmire triplets. When the Baudelaires enter the apartment building, they find that elevators are "out" which means they have to climb the long way up to the penthouse. When they get to the top, Jerome Squalor welcomes the children to their new home. He offers them "aqueous martinis", which is simply water with a olive in it served in a fancy glass, and introduces them to his wife Esmé Squalor. She is a very "in" person and the city's sixth most important financial adviser. She is obsessed with what is "in" and "out", and explains that orphans are currently "in". Esmé presents the children with "in" pinstriped suits, overriding Jerome's suggestion that the children should be allowed to choose their own clothing. Jerome generally seems to avoid arguments with Esmé, constantly following her instructions. Esmé describes that the children and Jerome will have dinner at Café Salmonella, because she will be busy privately discussing arrangements for an auction with trendy auctioneer Gunther.
The Baudelaires immediately recognize Gunther as Count Olaf, despite his attempt to disguise his eyebrow with a monocle and high boots to cover up the tattoo of an eye on his ankle. Despite their protestations, Jerome takes the children to the restaurant. Jerome believes the children are being xenophobic and dismisses their suspicions of Gunther.
The children are left alone in the penthouse the next day when Esmé and Jerome head off to pick up crates of the new "in" drink. They search the penthouse for Gunther but find nothing. The orphans go listen for him at the doors of other apartments, to no avail.
Klaus notices that there is one elevator on each floor except for the top floor which has two. The children investigate and find that the extra elevator is a fake, "ersatz" and consists of nothing but an empty shaft. They climb down the shaft, using a self-constructed rope of Violet's design, to find that the two Quagmire triplets are trapped in a cage at the bottom of the shaft. The Quagmires say that Count Olaf, disguised as Gunther, is planning to smuggle them out of the city by hiding them in an object at the "In" auction, which one of his associates will bid on. The Baudelaires return to the penthouse to find tools with which they can free the Quagmires, but when they return the children find that Gunther has spirited the Quagmires away already. They return, dispirited, to the penthouse.
Klaus finds a Lot #50, V.F.D. in the auction catalog. Esmé pretends to believe the children's story about Gunther's plot to kidnap the Quagmires, but when they show her the ersatz elevator, she pushes them down the empty shaft. They land halfway down in a net.
Sunny climbs up the shaft with her razor sharp teeth, gets their ersatz rope and jumps back down into the net. Sunny bites a hole in the net, they attach the rope to the pegs that hold up the net and climb down. They travel along the hallway at the bottom of the shaft, using Violet's ersatz welding torches for light, only to find that it is a dead end. Pounding on the "ceiling" reveals that it is in fact a trap door; the children escape through it only to find themselves in the charred remains of the Baudelaire Mansion, their home at the beginning of the series.
They rush to Veblen Hall, the location of the auction, and join the crowd already there. The auction has begun, and Gunther and Esmé are on the stage auctioning off Lot #46. The children ask Jerome and Mr. Poe to buy them Lot #50 as a present. Mr. Poe and Jerome back down but Sunny bids 1,000 dollars on it and wins. The Baudelaires rip open the box only to reveal Very Fancy Doilies. Gunther slips on the doilies and is revealed as Count Olaf when his boots and monocle fly off, revealing his eyebrow and tattoo. He and Esmé flee, pursued by the audience . The doorman is revealed as The Hook-Handed Man, and the Quagmires are hidden in the red herring statue. Although Jerome wants to keep the Baudelaires, he insists on taking them far away. They refuse this, however, because they want to rescue the Quagmires. The story ends when Jerome is forced to give them up, because he is too cowardly to help them, Mr Poe is calling a Vietnamese restaurant instead of the police and the three children sit on the stairs of the Hall.
source: Wikipedia
