Two teddy bears armed with laser guns appear in a spaceship in Nowhere searching for a "space worm" that ended up on Earth. At the farmhouse, Courage is outside playing a baritone horn when he notices that a mysterious small worm, whom has appeared from the ground, is serenaded by his horn playing. Muriel comes outside and offers Courage a peanut butter and jelly sandwich with "a wee dash of vinegar," which Courage doesn't like. So he distracts Muriel and spits the sandwich out, putting the rest of it in his pocket. The worm becomes frightened when Muriel notices him, but is quickly serenaded by the horn once more.
The teddy bears appear at the farmhouse and ask about the worm. Courage plays his horn, bringing the worm out of its hole in the ground. The bears tug at the worm, which turns out, after coming out of the orifice completely, to be a menacing, monstrous-like creature. The beast proceeds to consume Muriel and the teddy bears whole, so Courage gives chase in order to save his owner. Once he catches up, the teddy bears tell Courage through the worm's stomach to take it to a nearby planet back to his owner before they and Muriel are fully digested.
After he lures the worm into the teddy bears' bike-like spaceship with horn music, he flies into space to the planet where its owner, Tulip Girl, lives. When Tulip finds out that the teddy bears has been eaten by the worm, she tries pressing on the worm in order for him to choke the bears out, as the worm is fairly small compared to her size. But it turns out they're too far into the worm's digestive tract, and she becomes hysterical. This leads Courage into the worm's stomach to save the teddy bears and Muriel before they are dumped into a pool of stomach acid.
Courage eventually finds Muriel and the teddy bears waiting to get digested. Right at the last moment, he gets out the rest of peanut butter and jelly vinegar sandwich Muriel made from his pocket and drops it into the vat of stomach acid they're sliding into, which causes the worm to throw everyone up. After celebrating the return of her teddy bears and her worm, Tulip decides to keep Courage and Muriel as her pets. Muriel is frightened, so Courage peels off Tulip's bandage, uses it as a parachute, and takes the teddy bear's spaceship back to the farmhouse. Tulip yells out "Naughty pets!" but alas, the pair are already gone and have returned home.
- This is the last episode where Lionel G. Wilson voices Eustace.
- The scene where Muriel and the teddy bears are inside the Tulip Worm waiting to get digested in stomach acid could be a reference to the Sarlacc pit from Return of the Jedi.