SpongeBob and Patrick plan to go to the beach for the entire day, which they decide to take the bus. As they play on the beach, they inadvertently destroy the life guard tower. The life guard, angry, suggests they play in the sand somewhere else.
Later on, the two decide to build sand castles. After Patrick destroys SpongeBob's sand castle, SpongeBob draws a dividing line between them to end their dispute, but in vain. Patrick builds a castle on top of the line. SpongeBob damages the sand castle, only for Patrick to retaliate by destroying his again.
SpongeBob reconstructs his castle, but to a massive scale that rivals the size of an actual castle. Patrick responds by building one of his own. SpongeBob, hoping to avoid an all-out war, writes a peace treaty. Patrick signs it, but then later changes his mind, saying it "isn't worth the sand it's printed on" (The treaty disintegrates immediately after) after he fires an arrow at SpongeBob's fortress. SpongeBob, in turn declares war on Patrick and begins to improve the durability of his fortress. While he is doing so, Patrick builds an army of horse-mounted knights.
SpongeBob in self-defense builds a catapult and uses it against the knights as they storm towards him. He then summons his own troops to attack Patrick. Patrick retreats into his castle and returns with a cannon, in which he attacks SpongeBob's hit squad. The hit squad retreats, and SpongeBob manages to get them safely back inside his own fortress. It is in vain, however, the cannonball finds its way over the fortress wall and smashes them.
SpongeBob in retaliation builds a tank to destroy Patrick's fortress, while Patrick comes with a giant robot. The tank and the robot clash, and the robot gains the upper-hand by picking up SpongeBob's tank. As it prepares to crush the tank, SpongeBob fires the tank's cannon monsters and destroys Patrick's robot. He for the next moment thinks he is victorious, but Patrick returns on the robot's head, which has separated from the body and is now an airship.
SpongeBob pulls out a remote control and pushes a button on it, calling in a fighter jet which he hops into the cockpit and takes control of. As Patrick tries to run, SpongeBob has two missiles from the fire jet chase him. Civilians on the beach begin to flee in terror. Patrick deploys a surface to air missile launcher from underneath the ground. He has it fire its eight loaded missiles at SpongeBob, destroying the two missles that were chasing Patrick in the process. SpongeBob takes evasive maneuvers and manages to get them to fly into Patrick's fortress, completely destroying it. Patrick in a final act of retaliation uses his airship to blow up SpongeBob's fortress. SpongeBob is extremely enraged by this, and putting all sensible options aside, he flies his fighter jet into Patrick's robot head airship, destroying both aircrafts and hurting Patrick and himself.
SpongeBob and Patrick are lying wounded on the beach, apologizing to each other for trying to destroy the other when the life guard shows up and demands they clean the mess of debris and rubble left by the fight. They do as he says, tidying the beach up to its original condition but soon begin to compete with each other over who could do so faster as a sunset approaches.
This episode points out SpongeBob's strange driving habits; he's horrible when driving a boat, but beyond excellent when driving literally anything else.
When SpongeBob rams his entire war-plane at Patrick's rocket, this is a military strategy known as kamikaze, where someone will deal severe damage to their enemy at the cost of their own life. This was heavily employed by the Japanese against the United States of America during World War II.
SpongeBob quotes the famous saying, "All is fair in love and war," which has been parodied a lot in popular culture.
The robot Patrick built to fight SpongeBob looks a lot like Commander Yanmark from Mega Man 6. Except, it doesn't have wings and the sand replaces the head, hands, propellers, and chest. The biggest resemblance is the waist and mouth plate.
The war-plane that SpongeBob was flying resembles the real world F-16 fighter jet. The only contradictory occurrence is that F-16s can`t hover like his briefly did, but the newer F-35B Lightning IIs as well as older AV-8B Harriers have the technology making them able to do so.
When SpongeBob and Patrick are calling the frisbee "Small plastic disc that you throw," this is joking at the fact that the name "Frisbee" is copyrighted.
Interestingly, the term "Frisbee" is said by SpongeBob in "Ripped Pants." This episode may have taken place before that episode.
The episode gets its title from a season 3 episode of How I Met Your Mother of the same name. However, in that series, the episode title is spelled as "Sandcastles in the Sand" instead of "Sand Castles in the Sand."
Strangely, the general SpongeBob made was a human rather than a fish.
Things that SpongeBob and Patrick made with the sand in chronological order:
Castles (SpongeBob and Patrick)
Sand wall (SpongeBob)
Telescope (SpongeBob, assumed made from sand)
Treaty to end all hostilities between our (their) two kingdoms (SpongeBob)
Feather pen (SpongeBob)
Bow and arrow (Patrick)
Large sand cavalry army (Patrick)
Catapult and hatchet (SpongeBob)
Sand army (SpongeBob, made up of a bull, a rock star, a cowboy, a knight with a mace, and a warrior with a mohawk)
Heat-seeking sand cannonball (Patrick)
Situation room (SpongeBob)
Large tank (SpongeBob)
Large robot (Patrick)
Fighter jet (SpongeBob)
Missiles (SpongeBob and Patrick)
Sand "nuke" (destroyed both SpongeBob's and Patrick's castles)
SpongeBob (Sir SpongeBob) and Patrick (Sir Patrick) use cannons instead of rifles, machine guns, SMG's, sniper rifles, rocket launchers, armored vehicles (except Sir SpongeBob, who is using the British Crusader tank), AA and AT guns and aircraft (except Sir SpongeBob, who is using the jet plane).
This episode is a parody of Crusades and World War II.
The high-tech war-planning room inside the sand castle is a direct reference to the 1964 Stanley Kubrick film Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb.
The sand robot Patrick makes resembles Optimus Prime from Transformers.
The line "How do you like them apples" is a reference to the 1997 film Good Will Hunting.
When Patrick tore his skin off, his nose muscle is seen, though Patrick doesn't have a nose.
When SpongeBob and Patrick are kicked off the bus beside road but when Patrick says they're stranded, the road is gone.
When Patrick smashed SpongeBob's second castle, there is a wall around it. But when SpongeBob went back to square one again, the wall was gone.
When SpongeBob goes Kamikaze on Patrick by ramming him with his jet and they fall down, SpongeBob is shown with bandages even though he didn't have any.
After the camera pans over the destroyed beach, SpongeBob and Patrick's scratches and bandages disappear.
When SpongeBob sends his troops to attack Patrick's castle, a sand bull can be seen running out of SpongeBob's castle with the rest of his troops, but disappear when they arrive to storm Patrick. But when SpongeBob's troops retreat from Patrick's cannonball, the bull is again seen running back into his castle.