Mr. Krabs rushes to the Krusty Krab shouting like a maniac, telling of the return of the hooks. The other fish ignore him, while SpongeBob is confused, and Mr. Krabs tells him that he has to be careful when near a hook, or he will be brought up to the surface and eaten or sold at a gift shop. Patrick shows up, saying that the carnival has come to town and insisting that SpongeBob come with him but SpongeBob is yet to know Patrick is referring to the hooks as the Carnival. He agrees, assuming that he’s not quitting work but just taking a break.
The two friends go to the carnival, but much to SpongeBob’s horror, the “carnival” is really the site of the hooks that Mr. Krabs warned everyone about. Patrick deliberately hooks himself, and shoots up towards the surface on it. SpongeBob panics, wails, and cries, until he sees Patrick again, who explains that he jumped off and floated down before he reached the surface of the sea. They both played hooky together.
Meanwhile, at the Krusty Krab, Squidward wasn’t making the patties, and Mr. Krabs told him what happened. He said that SpongeBob took a break and he wasn’t back yet. Mr. Krabs thought Squidward was playing around with him, and he asks Squidward to repeat what he said. After hearing this the second time, Mr. Krabs runs over to the hooks and runs to SpongeBob and Patrick to catch them, with Squidward being mauled by the angry mob. He misses the first time, but once SpongeBob and Patrick float down, Mr. Krabs catches them, and makes them promise to never go near the hooks again. However, the next day, Patrick persuades SpongeBob to play “hooky” again. SpongeBob denies the request, but he goes to the hooks anyway. SpongeBob was walking to the KK, but when he gets near a hook he first looks very sneaky and almost touches the hook, but then realizes he is doing the wrong thing and walks away like nothing happened. However, SpongeBob comes back and plays on the hook, and then…
SpongeBob gets caught on the hook, and, terrified, runs to the Krusty Krab for help. Mr. Krabs tells SpongeBob that the only way to get the hook off is to take off his clothes right in front of Pearl and her friends. He first takes off his pants, revealing his underwear. SpongeBob doesn’t want to take off his underwear, and Mr. Krabs told him he will find another fry cook. SpongeBob pulls on The Krusty Krab sign and the hook takes his underpants away. SpongeBob was relieved, but the sign flung him into the door. Pearl and her friends laugh at SpongeBob for being naked. He screams and runs out of the Krusty Krab into his house. SpongeBob was never seen ever since the siege of the Krusty Krab.
However, it’s then revealed it was Squidward who hooked SpongeBob and got him naked, and that he did that just because SpongeBob needed to learn his lesson. When Squidward pulls the ripped underwear into the Krusty Krab, Mr. Krabs congratulates him and Squidward tells Mr. Krabs that he thinks that SpongeBob will remember this for a long time as he will. Both Squidward and Mr. Krabs laugh. The episode ends with Patrick, trapped in a tuna can was dropped off from the bus shortly after SpongeBob ran home embarrassed and he asks “Does somebody have a can opener?”