A crowd of hungry nematodes arrives in Bikini Bottom early in the morning. They eat through a variety of items, such as coral and a Boatmobile with the driver still in it. They then make their way to SpongeBob's pineapple house. They pull out straws and start eating/drinking his house. Meanwhile, SpongeBob and Gary are inside, sleeping, as everything starts to shrink. SpongeBob and Gary wake up, run outside the house, now reduced to what SpongeBob thinks is a small pebble, and see what the nematodes have done. SpongeBob calls Squidward on the phone, and Squidward asks if it is time for SpongeBob to ruin his day. Then Patrick gets up and says "Is it already time to ruin Squid's day?" When Squidward sees that SpongeBob's house is gone, he starts saying goodbye to SpongeBob, but throws a party inside his house, with confetti and streamers flying out of his front windows. Now that the house is no longer there, SpongeBob says that he will have to move back in with his mom and dad. However, Patrick tells SpongeBob to build a new house and SpongeBob agrees with Patrick.
Later, SpongeBob and Patrick attempt to build another pineapple house, but things fail. SpongeBob and Gary try to sleep with Patrick, but Patrick won't share his rock, which the two are using as a blanket, and they get into a tug-of-war. After Patrick's snoring makes SpongeBob put corks in his ears, he begins drooling in his sleep. SpongeBob absorbs the drool and waddles over to Patrick. He then puts a giant cork inside his mouth. Later, Patrick has dreams that spiders are attacking him, and hits SpongeBob repeatedly with the rock, crushing him. SpongeBob decides to sleep far away from Patrick, but he has another nightmare, and the charade repeats.
SpongeBob gives up sleeping with Patrick and goes to sleep with Squidward. SpongeBob asks Squidward for a glass of water, and Squidward, who is still half-asleep, brings him one. When they say goodnight to each other, Squidward realizes that SpongeBob is sleeping with him, and kicks Gary and SpongeBob out of his house.
The next day, Squidward gets up early so he can see SpongeBob move back with his parents. When SpongeBob's parents arrive, Patrick starts crying hysterically, and Squidward starts dancing and singing. SpongeBob finds a small pebble (the only thing left when the nematodes ate/drank his house), and buries it where his house used to be, because it holds too many memories. He begins to tear up, and one tear falls on the spot where the pebble was planted. However, the pebble is actually a seed, and SpongeBob's tear causes his house to grow back. The house is placed back where it was, crushing Squidward, who was dancing on the remains of SpongeBob's house with joy.
It is shown that Patrick has a hole in his home under the rock in the beginning of the episode, as well as future episodes do, but when SpongeBob spends the night, it is shown that under the rock is just leveled ground and Patrick uses the rock as a blanket.
It is revealed that Patrick has a fear of spiders, also known as arachnophobia. In reality, arachnophobia is the most common fear among humans.
Patrick's fear of spiders is very irrational since spiders both don't live underwater, nor can they even survive underwater. This is perhaps to show he's not smart enough to know that. However, spiders were seen in the Season 2 episode "Patty Hype."
When SpongeBob wears his cap, it's the cap that he wears when Stephen drew him as SpongeBoy.
It's also the only time SpongeBob wears a green baseball cap.
"Home Sweet Rubble" is a direct sequel to this episode.
In the Polish version, this episode is called Nie ma jak w domu which means Home Sweet Home.
In this episode, SpongeBob thinks he can't build a house, but in the following episodes he builds something else:
When SpongeBob sits up on his bed, the back disappears.
When SpongeBob is wearing the pineapple he and Patrick built, his nose is much longer than usual.
When SpongeBob and Patrick are fighting over who has the rock, Gary (who is on the top of the rock) disappears.
When SpongeBob is shivering, he is missing about three of his teeth, then one second later he goes back to having just two buck teeth again.
When SpongeBob is shivering, the red line under his mouth is gone for a split-second.
Before Squidward returned to bed after giving SpongeBob a glass of water before he returned, the pillow was squared, only to fit for one person, but when Squidward goes to bed with SpongeBob, the pillow gets wide enough for two people.
When Squidward gets ready, he throws a sock and a pair of underwear. He does not wear either of those things, so it unknown why he owns them.
When SpongeBob waits for his parents, he carries his luggage even though his house and furniture was still gone.
When SpongeBob's parents arrive at his home, his father says there's dinner waiting, but during this time it's only morning (as Squidward just woke from his sleep). There are two possible outcomes on why he said there was dinner waiting:
SpongeBob's parents' house is located so far away that when they reach it, it's already night there so at the time they arrive they'll immediately have dinner. Also, towards the end of this episode, SpongeBob said goodbye to Bikini Bottom, which indicates that his parents do not live outside of that city.
SpongeBob's father could be referring to lunch as dinner.
When Squidward is saying goodbye to SpongeBob, he is taller than usual.
Just before the seed begins to take root underground, Squidward says "He's leaving!," but the closed-captions say, "Yeah, baby!"
Near the end of the episode, SpongeBob wears his hat when he's going to plant the seed. Yet, when he actually plants the seed, you see his face in close-up, but without the hat. After planting it, the hat reappears.