It follows the story of two African-American high school students, William Gates and Arthur Agee, in Chicago and their dream of becoming professional basketball players.

At the end of the year, Agee is kicked out of St. Joseph as his family is unable to pay his tuition; Gates's fees are covered by his sponsor, the president of Encyclopedia Britannica, who also helps him find a white collar summer job.

On the court, Agee and John Marshall improve on their poor sophomore year record, including winning an upset victory over Dunbar Vocational High School.

Despite his injury, Gates is courted by many college basketball programs, especially Marquette University, and attends the Nike All-America summer camp at Princeton before his senior year (where Dick Vitale and Spike Lee make appearances).

After returning from camp, Gates signs a letter of intent with Marquette, though he struggles to meet the minimum ACT test score to be eligible for an athletic scholarship.

In Gates's senior year, St. Joseph's season concludes early in a second-round play-off loss against Nazareth Academy, ending his hopes of "going downstate" for the state championship.

At the end of the film, Gates has entered Marquette University in Milwaukee, Wisconsin, and Agee is attending Mineral Area College in Park Hills, Missouri and still hoping to play for the NBA.

Unable to raise any money besides James's grant, the pair decided to shoot on video instead of film (an unusual choice for the time), and they hired Peter Gilbert to do cinematography as he had his own gear.

Pingatore introduced them to "Big Earl" Smith, a talent scout who was familiar with the inner-city playgrounds that the filmmakers wanted to shoot on.

Agee agreed to be part of the film, and Smith helped arrange for him to attend Coach Pingatore's summer camp, where Thomas would be making an appearance.

While continuing to search for more funds, the filmmakers considered other ideas, including a segment on a female high school player and a comedy sketch starring Tim Meadows.

By continuing to include Agee even after he was dropped from St. Joseph, they won the trust of him and his family, and the filmmakers began to delve deeper into the personal lives of the boys.

[4] Its appearance at Sundance helped it secure a distribution deal with Fine Line Features,[4] and the film opened nationwide on October 21, 1994.

[14] In 2005, Hoop Dreams was included in the annual selection of 25 motion pictures added to the National Film Registry of the Library of Congress, being deemed "culturally, historically, or aesthetically significant" and recommended for preservation.

[48] According to Roger Ebert, reliable sources said members of the Academy's documentary nomination committee had a system in which one would wave a flashlight on screen when they gave up on the film.

Hoop Dreams was watched, but the nomination system at the time was based on total points earned when voters gave ratings from 4 to 10 for each documentary.

[51] In response to the controversy, Bruce Davis, the Academy's executive director, asked accounting firm Price Waterhouse to turn over the voting results, in which each voter had given a rating from zero to ten to each of the eligible documentaries.

[53] The producers gave both Gates and Agee almost $200,000 in royalties from the film, although they were barred from accepting the money until after college due to National Collegiate Athletic Association rules.

[5] In 2001, Gates practiced with Michael Jordan ahead of a tryout with the Washington Wizards, but he fractured his foot and decided to retire from basketball permanently.

[54] Agee, the younger of the two basketball players, launched a foundation promoting higher education for inner-city youth and began the "Hoop Dreams" sportswear line in 2006.

Agee's half-brother DeAntonio was killed on Thanksgiving morning 1994, and Gates's older brother, Curtis, was shot to death in Chicago Lawn in September 2001.

Patrick Beverley from Chicago's West Side appears as a struggling potential star also at John Marshall Metropolitan High School and is mentored by Agee and basketball coach Lamont Bryant.