Cuddles gets brainwashed by the Canadian military to be a killer zombie when triggered by a code word. Unfortunately, something sets Cuddles off and Dan has to figure out how to stop him.
Dan has decided it's best if Bill gets a lobotomy - He is simply too dangerous for society. It turns out the lobotomy doctor and Bill have much more of a past than could have ever been expected - the doctor is the son of a man Bill once killed.
The puppets steal a car from outside a variety store, and head out for a joyride. Also, Buttons the Bear hitches a ride with an odd couple who mess with his head.
The puppets find an old TV for a very cheap price - too cheap in fact. They discover the TV has some very scary secrets to reveal, and is not so easy to get rid of. A mostly black and white homage to the old Twilight Zone TV series.