We present the first detailed analysis of the rest-frame UV spectrum of the gravitationally lensed Lyman break galaxy (LBG), the `8 oclock arc. The spectrum of the 8 oclock arc is rich in stellar and interstellar medium (ISM) features, and presents several similarities to the well-known MS1512-cB58 LBG. The stellar photospheric absorption lines allowed us to constrain the systemic redshift, z_sys = 2.7350+/-0.0003, of the galaxy, and derive its stellar metallicity, Z=0.82 Z_sol. With a total stellar mass of ~4.2x10^{11} M_sol, the 8 oclock arc agrees with the mass-metallicity relation found for z>2 star-forming galaxies. The 31 ISM absorption lines detected led to the abundance measurements of 9 elements. The metallicity of the ISM, Z=0.65 Z_sol (Si), is very comparable to the metallicity of stars and ionized gas, and suggests that the ISM of the 8 oclock arc has been rapidly polluted and enriched by ejecta of OB stars. The ISM lines extend over ~1000 km/s and have their peak optical depth blueshifted relative to the stars, implying gas outflows of about -120 km/s. The Ly-alpha line is dominated by a damped absorption profile on top of which is superposed a weak emission, redshifted relative to the ISM lines by about +690 km/s and resulting from multiply backscattered Ly-alpha photons emitted in the HII region surrounded by the cold, expanding ISM shell. A homogeneous spherical radiation transfer shell model with a constant outflow velocity, determined by the observations, is able to reproduce the observed Ly-alpha line profile and dust content. These results fully support the scenario proposed earlier, where the diversity of Ly-alpha line profiles in LBGs and Ly-alpha emitters, from absorption to emission, is mostly due to variations of HI column density and dust content (abridged).