SpongeBob is brushing Gary when he hears a strange noise. He goes outside to investigate, only to find out that it's just Squidward breathing. Squidward then tells SpongeBob that he will pay him five dollars if he gives him peace and quiet for the rest of the day. However, Squidward already gave SpongeBob five dollars to leave him alone yesterday. He gets annoyed, so Squidward begins walking away. He then finds out that SpongeBob is following him, so he starts running and he jumps onto his boat. However, he can't find the keys and then SpongeBob arrives at Squidward's boat. Squidward then becomes furious, only to find out that SpongeBob wanted to give him his keys. Squidward drives away and literally drives through a stop sign. He gets pulled over by a police man, telling him that he needs to go to boating school.
After that, the scene changes to Squidward walking up to Mrs. Puff's Boating School and once he opens the door, he sees SpongeBob and then starts to cry. During class, Squidward is forced to sit next to SpongeBob. Then Mrs. Puff asks Squidward why he is enrolled in Boating School, so he tells everyone in the class while SpongeBob heavily breathes during this, annoying Squidward. After, Mrs. Puff tells SpongeBob to illustrate his side of the story, but SpongeBob just draws a picture with him and Squidward saying "SpongeBob And Squidward, Best Boating Buddies Forever" on the chalkboard.
Later, it is lunchtime and Squidward tries to avoid SpongeBob. He then decides to eat in the bathroom, where he is beaten up. He arrives back in class with SpongeBob, and Mrs. Puff tells him that he has to drive with SpongeBob for a test. So they get inside a boat and SpongeBob is the driver. However, he drives out of control and crashes into a research lab. There, he, Squidward, and Mrs. Puff shrink and get washed down the drain. SpongeBob and Mrs. Puff end up in a water fountain back at Mrs. Puff's Boating School, while Squidward ends up in the bathroom and gets beat up again.
The scene changes to everyone back in class. Mrs. Puff explains that everyone is going to do a test. But when SpongeBob tries to help him, Squidward snaps at him exclaiming that they aren't "Boating Buddies" and he never wants help from him ever again. SpongeBob's feelings are hurt. However, Squidward can't do the test because he can't pick up the pencil, so he asks for SpongeBob's help; when the sponge reminds him of what he said, Squidward denies it, only for his voice to have been recorded by another student. Finally, when Squidward admits that he and SpongeBob are "Boating Buddies," SpongeBob cheers. But time runs out and Squidward asks Mrs. Puff what to do. She then says that he needs to come back the next week to retake the test. Squidward finds out that SpongeBob also failed the test and he has to come back the next week too, and Squidward screams as the episode ends.
Mrs. Puff says they all know why SpongeBob is in Boating School, but it is unknown how he went to Boating School in the first place. It is assumed that he just wanted to have the freedom to drive a boat and be on the road. There is much small evidence supporting this.
The close-up of SpongeBob breathing heavily while Squidward writes what happened on the chalkboard is exactly the same scene where SpongeBob breathes heavily to Squidward when he was previously sitting beside him.
When Squidward's hot chocolate landed on his head, SpongeBob said "Chocolate Rain!" (After coffee rain), this is a reference to the song "Chocolate Rain" by Tay Zonday.
When SpongeBob drives through the costume shop, Mrs. Puff is dressed like Jason Voorhees, the main antagonist of the 1980 horror film, Friday the 13th.
When Squidward says "I don't care what Mr. Krabs says!," when SpongeBob leans backwards slightly, SpongeBob's black belt turns white.
The outline of the newspaper on the table was blue, but when Squidward snatched it from the table, the outline was gray.
When Squidward walked away from SpongeBob, Squidward had a newspaper in his hand, but in the next shot, he doesn't.
Squidward says he has no criminal record prior to getting the ticket. However, he got arrested in "Good Ol' Whatshisname" (though, this episode could've taken place before that episode).
During the close-up of SpongeBob breathing heavily, when SpongeBob blinks, his eyelashes are visible for a split-second.
When Squidward screeches the chalkboard, he appears to draw a line. That line is not seen again when it shows a shot of the whole chalkboard. Squidward wasn't shown erasing that line either.
After Squidward is done with his illustration, he doesn't erase the board when he is finished, and when SpongeBob is drawing, there is no trace of Squidward's drawing left, and was never seen picking up an eraser.
When SpongeBob draws the curl on the line, it disappears when the camera zooms out to the entire chalkboard.
When Mrs. Puff says "Now, we're going to take this nice and slow.," she blinks her eyes but her eyelashes are still seen.
When Squidward sits down to take the final exam, he is neither holding a pencil nor is there a pencil on his desk, but in the next shot, he has a pencil laying on his desk.
In the scene where Squidward is talking to SpongeBob about him needing his help, Debbie Rechid was totally pink and in the next shot, she is purple.
In this episode, SpongeBob's cheeks appear bigger (or his mouth was smaller) than usual.