After being told not to, Squidward wears a sombrero in a goofy fashion, waves a flashlight back and forth, wears a hoop skirt and clown shoes, stomps around, and holds a plate of cubed cheese in attempt to prove to SpongeBob and Patrick that sea bears are a myth, only to be proven wrong seconds later.
Cheese plays an important role during the opening of the movie. In a dream, SpongeBob is informed by Mr. Krabs that a customer's patty does not contain cheese, so SpongeBob bursts into the Krusty Krab to put a slice of cheese on the burger. Afterwards, he comes out and holds a happy Phil with his Krabby Patty, saying "Order up."
After Patrick gets a sense of smell from plastic surgery, numerous odors interfere with his fresh air, one of them being cheese from Squidward's refrigerator, which Patrick then destroys with a rocket launcher. Squidward, angered, explains to Patrick that cheese is supposed to have a pungent odor to it.