It's May 1968, and Ponyboy is about to graduate from Will Rogers High School. The surviving gang members are there to cheer Pony on, even Steve, who has to admit he's happy for the little guy. The principal drones on and on as he gives his speech, the valedictorian and salutatorian give their speeches, and then— finally— it's time for the diplomas to be awarded. The guys don't recognize the first few names, but because "C" is only the third letter in the alphabet, it's not long before the principal says,

Ponyboy Michael Curtis!

Once Pony's name is announced, Two-Bit starts screaming his head off. Soda is grinning from ear to ear and giggling, Darry is trying not to start sobbing right there in the auditorium, and even Steve manages a golf clap.

Yeah! Pony!

Two-Bit exclaims, and the others join him.