One day, SpongeBob and Patrick are playing, when they land in a bush. They destroy it, and the two find a worm that lived in the bush. SpongeBob takes it home, and introduces him to Gary, who takes an immediate dislike to it. They fight, and SpongeBob pulls them apart. Later that night, SpongeBob lets his new pet stay where Gary usually sleeps, and Gary is sent to the guest room, which he does not like.
The next morning, SpongeBob wakes up and sees the worm in a type of pain. He runs to Patrick because he does not know what to do. They go back to SpongeBob's house and see that the worm has given birth to baby worms. SpongeBob and Patrick try and put Gary and Mrs. Wormsley together, but she attacks Gary again, and Gary chases Mrs. Wormsley out of town on a bus, so SpongeBob is left to take care of the worm babies. Because Patrick is not willing to help with this situation, SpongeBob tries to find a person who will adopt the baby worms.
He first takes the worms to Squidward's house, in which Squidward is disgusted by them for vomiting a type of acid at his face. He then takes it to Mrs. Puff, in which she is shocked by them and puffs, damaging her house. SpongeBob then proceeds to go to a grocery store, stumbling upon Larry the Lobster. He decides to take them, but only to eat them alive due to raw protein, in which SpongeBob knocks them out of Larry's hand. The worms land in the middle of the road right in front of a moving truck, in which SpongeBob reacts. He goes inside the truck to pull out the connections to the engine, and unscrews and gets rid of the engine, forcing the truck to halt.
SpongeBob then scoops up the meadow worms and puts them in the box that they were in. After this, SpongeBob tries to sell them to Mr. Krabs, in which he declines because the worms spit up on his face as well, and forces him to take the worms out of his restaurant. SpongeBob puts them by the garbage, but the babies spit on him too. Garbage men come up and they are about to take the garbage away when they see the acid on SpongeBob's face. They see that it is a very rare type of worm, and Mr. Krabs comes out, hearing how it is rare and they would bring a lot of money. In the end, SpongeBob and Mr. Krabs sell the worms to the people of Bikini Bottom.
Larry the Lobster apparently does not know who SpongeBob is in this episode, even though he interacted with SpongeBob in previous episodes, such as "Ripped Pants" and "SpongeGuard on Duty." This happens also in "A Life in a Day." It could be possible this episode chronologically takes place before "Ripped Pants".
Several people have mistaken the name as "Pets or Pests" which mistakenly adds an extra "s" in the title.
Running Gag: Baby worms throwing up and people rejecting the worms.