Prologue: In flashback, we're shown a battle to end all battles. Side by side with Magneto, Xavier and his X-Men face down the island that walks like a man, Krakoa. The X-Men
seemingly fall in battle. All is lost. With his dying breath, Xavier compels his old frenemy Magneto to fly from the scene. Magneto watches in horror as Krakoa consumes the team and sinks to the bottom of the ocean.
Present Day: Magneto is a drunken wreck, tormented by nightmares of his friend dying. Magneto is at his lowest, self-destructive and borderline suicidal. Salvation comes in the form of Gabrielle Haller, former girlfriend of Xavier and mother of his son, David. David is a broken boy who needs help that maybe only Magneto can provide, perhaps using some variation of the Cerebro tech. If Magneto couldn't save Xavier then at least he can save his son.
Taking residence in Xavier's old mansion, Magneto uses its facilities to get David under control. Proud of himself, Magneto sits behind Xavier's old desk and marvels at his accomplishment. It's at this point that Magneto stumbles on a massive file of prospective X-Men, New Mutants. Emboldened by his newfound success, Magneto takes it on himself to carry on with Xavier's dream of mutant integration.
One by one, we meet the New Mutants, kids in need of help like David. Here's where we get the requisite rescue montage. At first, the group doesn't really get along. Though some hide it with false bravado or wide eyed enthuiasm, they're each as broken and insecure as David was at first.
It's only after a brief run in with a decomissioned Sentinel that they bond. Magneto's power isn't what it once was, due to the Krakatoa battle, and it's up to his New Mutants to save the day. Unknown to the team, the Sentinel was sent as kind of spy, relaying intel to the latest version of the Hellfire Club. The Hellfire Club sees Magneto's new team and is looking to poach them for their own nefarious purposes.
Just when the team is finally starting to get along, the Hellfire Club's Selene starts breeding discord and mistrust for Magneto. Did HE send the Sentinel? Is he trying to simply create a new Brotherhood? What's his plan? Nobody trusts him. The Hellfire Club has them where they want them. They'll trust anybody who isn't Magneto - including the "kind faces" of the inner circle. The kids all defect, leaving Magneto alone once again.
Unlike Magneto, who was adamant about not sending the kids into battle, and possibly to their deaths, the Hellfire Club starts to use them as their muscle. For a brief moment, their ranks swell as they join the Hellfire Club's other acquisitions, the Hellions. One by one, probably starting with Rahne or Sam, the New Mutants all start to realize that something is deeply wrong. They were tricked. Magneto was right.
Attempting to return to Xavier's, the New Mutants are forced to confront the Hellions on their way out. All of their hard work and training from Magneto works to their benefit as they easily hand the Hellions their @$$es. Unfortunately, the way out is not that easy. Selene manages to exploit David's weakness and fractured psyche, using him as a living weapon. The New Mutants have only two options, stay or die.
Magneto shows up in the nick of time, taking on Selene himself and leaving the New Mutants to face David, now Legion. Punch. Bite. Attempted possession. They slowly wear him down. In the end, in a moment of lucidity, it's David who ends up taking himself out of the picture and putting himself into a self-induced coma.
Beaten, but not broken, the team (and Magneto) limps home back Xavier's.
Epilogue 1: Having walked through fire, the New Mutants are that much stronger. They're a team. They have proven themselves. They now see themselves as X-Men. Magneto laughs. X-Men? Not yet. Maybe one day. After some more training. Who knows what the future will bring? There's an even more dangerous world out there.
Epilogue 2: The camera fades in to a very bright light. Somebody is coming to. It's Xavier. He's alive. ... ON A SPACE SHIP!!!! Cut to credits.