In the small town of Húsavík, Iceland, Lars Erickssong and Sigrit Ericksdóttir, best friends since childhood, make music together as the band Fire Saga, much to the dismay of Lars’ widowed father, Erick. Lars has one dream: to win the Eurovision Song Contest. Lars, in particular, is deeply into his “art”, but at the local bar where they play, the only song the audience wants to hear is the suggestive nonsense song “JaJa Ding Dong”. The pair apply and are randomly selected to take part in Söngvakeppnin, the Icelandic pre-selection for Eurovision. Sigrit, who believes in the old Icelandic tradition of elves, asks them to help them in the contest in the hope that, if they win, Lars will finally return her romantic feelings for him.
Due to technical difficulties, Fire Saga’s performance at Söngvakeppnin is a disaster; the talented Katiana Lindsdóttir wins. Lars, dejected, declines to attend the boat party thrown for all the finalists and sits disappointed on the dock as Sigrit tries to comfort him. The boat suddenly explodes, killing everyone on board. Fire Saga, as the only surviving contestants, become Iceland’s entry to the Eurovision Song Contest by default. Lars and Sigrit arrive in Edinburgh, Scotland, where Eurovision is being held. Once there, they struggle with a new remix of their song and Lars’ desire for an elaborate stage design. They meet Alexander Lemtov, a Russian singer who is the favorite to win the contest.
He invites them to a party at his house, attended by a number of real former Eurovision contestants, where he introduces Lars and Sigrit to the Greek contestant Mita Xenakis. Alexander and Sigrit spend the night together, as do Lars and Mita (although neither pair has sex). This creates tensions within Fire Saga, and almost derails their plans for the semifinal. Lars overhears Sigrit working on a new song in their hotel room and wrongly assumes it is a love song for Alexander. Katiana’s ghost appears to Lars and warns him that his life is in danger; he ignores her.