Billy Budd & Typee takes place around the late 1700’s. Billy Budd is assigned to The British naval ship H.M.S. Bellipotent from his previous ship the Rights-of-Man, a merchant ship. Billy's commanding officer, Captain Graveling, doesn’t want to let one of his best men go, but has does not have choice in the face of the superior ship.
Billy packs up his gear and follows the officer of the Bellipotent. After Billy gives a good-bye to his old ship mates, He settles in quickly among the company of the Bellipotent. He is useful and eager in to work, and is assigned to foretopman and gets to know more experienced sailors.
Billy is very upset by the sight of a violent wiping given to one of the ship's crew. Hoping to avoid a this kind of punishment, Billy works harder at his duties, but finds himself not measuring up to certain officers. So Billy goes to get advice from the Dansker, an older, more experienced sailor. After explaining the situation to him, the Dansker tells Billy that Claggart, the master-at-arms, holds a grudge against Billy. Refusing to accept this, Billy dismisses the Dansker's opinion but continues to debate his situation.
Later, at a lunchtime, Billy accidentally spills his soup pan in the ship's dining room after a sudden shake of the ship. The soup trickles to the feet of the passing Claggart, who makes an light hearted remark about the spill. The rest of the men laugh, and Billy thinks that this is proof of Claggart's approval of him. But Claggart is actually quite offended by the accident, and feels that this is Billy‘s way of not respecting him . He sees this as proof of Billy's hostility, and for this he makes Billy work harder.
One night, an anonymous figure wakes Billy from his sleep on the upper deck and asks him to meet in a remote part of the ship. Confused, Billy agrees. At the strange meeting place, Billy becomes puzzled when the unidentified man flashes two gold coins in front of his face in exchange for a promise of cooperation. Billy recognizes that something is not right, and he raises his voice and threatens the man. The man quickly goes into the darkness, and Billy finds himself confronted with two curious sailors. Unsure of how to explain the situation, Billy explains that he simply happened upon a fellow sailor who was in the wrong part of the ship, and chased the man back to his proper station.
Later on, after a short battle with an enemy ship, Claggart approaches Captain Vere with news of mutiny and names...