The same thing I want with the Kremlin. I'm bored with corporations. With the information                                I can access, I can run things 900 to 1200 times better than any human.

Kevin Flynn is a young and gifted programmer who once worked for the software corporation ENCOM, creating several video games on the company's mainframe after hours in hopes to start his own software game company. However, another programmer, Ed Dillinger, stole Flynn's work and presented it as his own, earning Dillinger several executive promotions and allowing him to lock Flynn out of the company. Flynn started a video arcade with games he created, while attempting to hack into the ENCOM mainframe to find evidence of Dillinger's wrongdoings, but he is continually foiled by the Master Control Programmer (MCP) that detects and defeats Flynn's programs. MCP's actions inadvertently close out the work of another ENCOM employee, Alan Bradley, who created a security program named Tron to enforce ethics at ENCOM. Alan and his girlfriend Dr. Lora Baines discover that Flynn's hacking attempts are not going unnoticed and attempt to warn him. Instead, Flynn convinces them to gain him access to a low-security terminal in the ENCOM basement laboratory where Dr. Baines and her mentor Dr. Walter Gibbs are developing a method of digitizing real objects. Lora brings Flynn in there because the MCP will likely not be monitoring there, making it easier for him to find the evidence.

Meanwhile, as Flynn works at Lora's terminal, the MCP initiates the digitizer at Flynn, and sends him into the ENCOM mainframe. Flynn is initially confused but comes to learn that all the beings in the digital world are Programs that look to their mythical "Users" for instruction and advice. He also learns that the MCP has tightly controlled the system, with his commander Sark in charge of capturing all the renegade Programs. Sark has these Programs participate in a number of games for his amusement, with the losing Programs being erased from the mainframe. Flynn ends up in a light cycle arena game with Alan's Program, Tron, and the two manage to escape from the game grid, prompting Sark to send out his forces to chase them down. After their escape, they travel to a nearby I/O Tower where Tron receives instructions from Alan on an identification disk for how to destroy the MCP. As they are chased down by Sark, the two are separated, with Flynn temporarily disguising himself as one of Sark's forces. Tron meanwhile encounters Yori, a Program created by Lora, and the two begin to flee on a Solar Sailer towards the MCP. Flynn manages to catch up to them, and when he reveals he is able to disguise himself, Flynn is forced to explain that he is actually a User, which gives him the ability to create. However, they are caught by Sark's command ship, the Command Prompt, and while Tron is able to escape aboard Sark's shuttle, Flynn and Yori are caught and left aboard the de-rezzing ship; Flynn's abilities manage to keep Yori alive, and he pilots the ship towards the MCP.

Sark debarks at the MCP, escorting several prisoner Programs to be absorbed by the MCP. Tron tries to sneak into the MCP but he is detected, and the MCP sends Sark to battle Tron. Tron is able to gain the upper hand until the MCP transfers its functions to Sark, causing him to grow to enormous proportions. Flynn realizes the only way to end this is to disrupt the MCP, and from Sark's ship, sacrifices himself by jumping into the center of the MCP. The distraction gives Tron enough time to throw his disk into the center of the MCP, destroying it and Sark. As the corruption of the mainframe disappears, all the backed-up I/O requests to communicate with the outside world start flowing freely again, including the I/O request to return Flynn back to the real world. Flynn recovers at the data terminal, finding only a few moments have passed in real time, and that a nearby printer is delivering the information he needed on Dillinger's wrongdoing. The next morning, Dillinger comes to work and learns that the MCP program has gone off-line, his screen showing the same information that Flynn obtained. Flynn becomes the new CEO of ENCOM with the help of Alan and Lora.

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