On a fine day at the Krusty Krab, Patrick is behind the restaurant climbing out of a dumpster eating a left over Krabby Patty. The camera then pans over to SpongeBob, showing him reading The Krusty Krab Work Schedule book, much to Squidward being annoyed. Squidward picks up the book that was reading SpongeBob and questions on what's so great about it. SpongeBob then claims that the book has a list of "his happiest memories." Squidward takes the book and "accidentally" drops it on the grill. However, SpongeBob has multiple copies of the book in a cabinet, which he proceeds to get one. SpongeBob then asks Squidward if he has the happiest memory, in which he says, "No." Feeling concerned, SpongeBob tries to ask Squidward if he can help make the happiest memory for him, which he accepts.
First, SpongeBob takes Squidward to a concert; that did not go well, however, since the violin player accidentally shot Squidward in the eye with the violin bow. Then, both of them head to the Bikini Bottom Museum where one of Squidward's masterpieces is in the museum, which is praised by critics. Squidward is happy until a famous art critic named Fiasco burns his artwork with a flamethrower. In addition, after that, SpongeBob takes Squidward on a hot air balloon ride. That doesn't go well, since Squidward is afraid of heights, so SpongeBob tries to get Squidward down by popping the balloon (because the balloon has no heater to make it deflate) and both of them land on a mountain which is actually Mount Bikini, ruining Harold's chance to be the first one on the mountain. Then, SpongeBob, Squidward, and Harold slide off the mountain due to an avalanche. When SpongeBob and Squidward slide back to their homes, Squidward insists that he will never have a happiest memory.
Two weeks later, Squidward is left in his house doing nothing but being unhappy. SpongeBob then becomes even more concerned for Squidward and tries to get a hold of him, but to no avail. He then traps Squidward in a box and takes him to the Krusty Krab, where he reveals that he created a party to cheer Squidward up. Unfortunately, SpongeBob failed to get anyone else to come, because some of them were busy or sick, so instead, he made 100 papier-mâché life-sized models of himself. Squidward hates seeing more than one sculpture of SpongeBob in one place so he goes berserk, destroys all the papier-mâché sculptures, and claims this to be his "happiest memory."
The episode also shares the same name with a song sung by Megan and Liz.
When Squidward climbs the walls during his rampage, it is a reference to the Wacky Wall Walker, a toy that is thrown against walls, sticks to them, and looks like it's crawling down as it falls. The toy is designed to look like an octopus.
In the scene where SpongeBob cracks Gary's shell, it's in pieces, but next shot, it's repaired (unless he bought one from Angry Jack's Shell Emporium or it grew back).
Squidward drops the work schedule book on the grill and it burns immediately, but nothing happened to it when it was lying on the grill while SpongeBob was reading it.