American Me
(1992)

The blame of Santana's (Edward James Olmos's) last arrest is bestowed upon Little Puppet (Daniel Villarreal), even though the latter claims to be shocked and surprised by the incident, and that he wants to quit the "eMe" -that is, the mob group- in favor of having a family and settling down.  However, it is shown that Santana got busted due to a knife that was found inside a pocket of his vest, planted in it by Little Puppet.

J.D. (William Forsythe) encourages Santana to give the order to have Little Puppet killed, but Santana refuses, claiming that he's had it with that vicious circle of violence and tension.  J.D. leaves, dissapointed; however, he passes in front of Mundo (Pepe Serna), and they exchange a look that is a clear sign of "Kill Santana", because he's showing weakness.

Puppet (Danny De la Paz) is given the command to kill Little Puppet, or else.  He reluctantly does so, the day he gets out of jail and Little Puppet picks him up.  Meanwhile, Paulito (Jacob Vargas) is seen taking a young kid from the block along for a ride with another friend, and it turns out to be a sort of ceremony of initiation into the gang; Paulito's father calls him, but he pays no attention.  We also get to see Julie (Evelina Fernández), Santana's wife, putting some makeup over her gang tatoo she happens to have on her hand, like trying to hide the fact that she, just as everyone else, belonged to the gang.

Back at the prison, the homies call Santana out of his cell to confront him for his newfound softness, and then, stab him to death and toss his dead body from the balcony down, hiding the knifes in one of the guy's jacket, which they toss down too.

In the final sequence of the film, the kid riding with Paulito is made sniff some drug from a paper bag, and then given a gun to shoot and kill anyone, in order to prove his worth.  The kid does, as he shouts: "La Primera lives!!".  Title cards shown before the credits inform that, last year (1991, that is), there were over 3,000 gang-related deaths.
 

Thanks Dr Mat!