Mera Yaar Mera Dushman is a musical mystery drama. The movie revolves around two business partners and friends - Jagmohan (Pinchoo Kapoor) and Raj Narayan (A. K. Hangal), and their families. Jagmohan’s son, Ashok (Rakesh Roshan), is an aspiring dancer, while his daughter, Anita (Bindiya Goswami), is in love with a boxer, Vinod (Mithun Chakraborty). Raj Narayan’s son, Shakti (Ardhendu Bose) is a boxer, who only wishes to acquire the entire business, by marrying Anita. He frames Ashok for the murder of an employee, and turns the situations in his favor which will force Anita to marry him. Will Ashok be able to prove his innocence and also save his family from the evil plans of Shakti?