I can't think of a less appropriate name for the setting of this movie, one of the favelas or slums of Rio De Janeiro, which is based on the real history of the place. Through to the 1960's the police had control, but the police themselves were out of control - they tended to lord it over the City of God and victimise its inhabitants. Then they lost their power, as the result of a mistake by the powers that be. They had taken a handful of political prisoners, intellectuals, and thrown them into prison with about 60 violent (i.e. normal) criminals in the belief that they'd be beaten up and suppressed. Instead, the handful dominated and made converts of the other criminals - they all went back to the City of God and started up drug running operations as a means of obtaining peace and prosperity. This worked for a while, as the corrupt Police became scared to come in, but then tensions arose between various factions. This is where the film picks up the story.

So, what we have is a number of areas within the City of God, each run by a seperate drug "lord" (teenagers, according to the movie). Li'l Dice is about 12 or 13 at this stage - he comes up with this great plan for a group of older boys he hangs out with to hold up a motel used for prostitution. The problem is, they think he's too young to be involved and have him stand guard. He gets bored, gives the signal that the cops are on the way, then goes in and pretty much kills everyone in sight. He's 12, right, and laughing with maniacal glee - one of the most shocking scenes in the movie. We don't see much of what happens in the meantime, but on his 18th birthday, he decides to take over as boss of the entire City of God, killing off all opposition save one, who he can use and is a kind of mate. Of course, that one ends up being the enemy, and the latter part of the movie becomes a pitched battle between Li'l Dice and Carrot and their respective gangs. As Li'l Dice has ripped off the police over a deal for guns, they get involved as well.