The episode begins on another beautiful day at the Krusty Krab. Mr. Krabs once again foils another one of Plankton's attempts to steal the Krabby Patty Secret Formula and kicks him out. When Sandy notices Plankton and learns that he was trying to steal the formula, Plankton comments on how disappointing it is that Mr. Krabs constantly manages to thwart his efforts, despite the latter's overall lack of general intelligence. Sandy claims that Mr. Krabs would have to be as dumb as Patrick for Plankton to actually succeed in stealing the formula. This gives Plankton an idea.
Plankton breaks into Patrick's rock and takes a sample of his saliva. Plankton then makes the sauce in his kitchen, which smells horrible. Plankton explains to Karen that when he adds Patrick's saliva in the sauce, it will become Salsa Imbecilicus (aka, "Idiot Sauce"). He plans on giving the sauce to Mr. Krabs so he will become as dumb as Patrick and get the secret formula. Karen tries helping Plankton make the sauce, since he tends to mess things up, but Plankton refuses her help. But after Plankton adds Patrick's saliva to the sauce, it boils over and some of it splatters on to him, causing to become as dumb as Patrick. The steam from the sauce gets flown through the chimney and absorbs a nearby cloud. The cloud then rains the sauce over Bikini Bottom, which causes the whole town to become as dumb as Patrick.
The next day, Sandy notices that everyone, including her friends, is acting stupid. She learns about the accident from Karen---Karen deduces that Sandy wasn't affected because she must have been in her treedome at the time while Sandy figures that Karen wasn't affected due to the fact that she's a computer. They try snapping Plankton out of his idiocy by doing many things like shining a light on him, feeding him with nuts, and even simply yelling at him. But their efforts were no avail. However, after Karen points out that being smart takes work, Sandy gets an idea—she and Karen start Bikini Bottom University to try and educate the entire town back into their normal selves. By the end of the semester, Karen and Sandy have managed to educate the entire town except for Plankton, who continued to act dumb and became a school bully (particularly to Mr. Krabs).
On the day of graduation, Mr. Krabs perfects the Krabby Patty secret formula in Home Economics, but when Plankton gets a taste of it, he tries forcing Mr. Krabs into giving him the formula. However, SpongeBob shows up to give Mr. Krabs his diploma, as neither he nor Plankton had shown up for the ceremony. It also turns out that Mr. Krabs had taken accelerated classes and actually graduated months ago—it also turns out that he was never actually scared of Plankton, but was just acting it out for an acting class he was taking. Sandy gives Mr. Krabs his final grade for it (an A+) and Mr. Krabs launches Plankton outside through the window, where he smacks into Karen's computer screen. Karen takes Plankton home so he can start his "post-college years."
This episode has a similar ending to "Face Freeze!" as things did not completely go back to normal by the end of the episode.
This is the second time Plankton uses another character's DNA for one of his plans. The first time was in "Plankton's Good Eye." In that episode, Plankton uses SpongeBob's DNA and in this episode, he uses Patrick's DNA.
This episode takes place after "Perfect Chemistry" because that is the episode where Sandy and Karen met.
This episode might take place after "Patrick SmartPants," which would explain why Karen and Sandy don't try to teach Patrick because Sandy knows what smart Patrick is like.
This episode marks the second time a "One-Way Chalkboard" can be seen at the end of an episode. The first was in "New Student Starfish."
However, in that episode, the one-way chalkboard is in the opposite direction.
There is a reference to "New Student Starfish" when Sandy observes Mr. Krabs and Plankton through a chalkboard, which is what Mrs. Puff did for SpongeBob and Patrick in the aforementioned episode.
Sandy probably would've been okay even if she wasn't in her treedome because of wearing her space suit whenever she's outside.