The conflict in this story is between the boys and society (or you might call it "the way the world works").  The boys want excitement and adventure, but they find that things that seem like they would be exciting either A) become boring routine or B) are strange and frightening.

This is shown most clearly in the part of the story where Mahony and the narrator skip school.  They think that it will be exciting, but it becomes boring.  Then, things seem to liven up when the old man comes on the scene.  But he is weird and somewhat scary and perverted.

The conflict in this story is between the boys' desire for adventure and society (or "the world's") penchant for creating a situation where things are either boring or frightening -- nothing in between.