SpongeBob is asleep in his bed, then wakes up and realizes that it is Sunday, and therefore decides to have an ice cream "sundae" for breakfast. However, he sees he has no normal ingredients (ice cream, hot fudge etc.), so he creates a "sundae" made from onions, ketchup & peanuts from a nearly dead peanut plant he had been growing in his window. The sundae gives SpongeBob halitosis, which he does not realize. After breakfast, SpongeBob begins his Sunday to-do list that consists of saying "hi" to everyone in town. Everyone in town is disgusted by the smell of SpongeBob's breath, and avoids him. He is very confused by this, and asks Patrick if he notices anything wrong with him. Patrick, not having a nose, is unaffected by his foul breath (though his eyes get cracked after the scent hits him). He suggests that maybe everybody hates his laugh, and after a long and very irritating chuckle; SpongeBob flatly asks his friend if he's kidding. Patrick then comes to the conclusion that SpongeBob is ugly, and then does a "Reflection Test." SpongeBob is shocked by this, and isolates himself in his home.
Later, Patrick visits SpongeBob, who has now become a hermit. Patrick tells SpongeBob "The Ugly Barnacle" story, somewhat thinking it would help (which, of course, it didn't).
Patrick then attempts to teach him to be proud of his ugliness. It works, and SpongeBob's confidence grows, so they go to The Reef at night.
When they go in and sit down, all the fish still avoid SpongeBob. Angered that no one has the nerve to face SpongeBob's so-called ugliness, Patrick goes into a maniacal rage and forces the other viewers to look at SpongeBob. They all panic and run out of the theater, due to SpongeBob's breath. Patrick eventually gets hungry, so they go to get a snack, but no one is at the counter, so SpongeBob gives Patrick some of his sundae. Then Patrick goes to the bathroom.
When a guy runs away from Patrick in the bathroom, he thinks he has caught the "ugly" from SpongeBob. SpongeBob smells Patrick's extremely foul breath, and comes to the realization that they are not ugly, and simply have bad breath from the sundae. Afterwards, the two begin to run around shouting "We stink!" melting down The Reef with their corrosive stench. In the last scene, SpongeBob & Patrick run into Squidward, who is looking at wigs in a window display, and SpongeBob said, "Guess what, Squidward?" and they said "We stink!" Squidward looks confused as SpongeBob and Patrick run away laughing.
The shot where Fred is seen screaming, "DEUUEAUGH!!!!" has become a MAJOR YouTube phenomenon. He has been commonly referred "Deauuagh fish." The site includes videos of him screaming that for long periods of time, (ten hours, ten minutes, etc.), and videos of other popular fiction characters imitating the scream. There are also videos of the scream in multiple languages, up to around 15 in a single video.
Because of this, this episode has become fan favorite.
After SpongeBob finishes his sundae, he says "You know what they say, Gary...I'm easy like Sunday morning." a reference to the lyrics to The Commodores' "Easy."
In all U.S. airings of this episode, SpongeBob walks up to a building and says "Hi, building!" which causes the building to flee from SpongeBob's breath. He goes up to Patrick and says "I just don't get it!" and Patrick says "I don't either."
On VHS/DVDs, all Polish, Australian & YTV airings, the scene goes:
SpongeBob: (walks up to a building and waves) I just don't get it! (the building flees)
Patrick: (offscreen) I don't, either. (SpongeBob walks up to Patrick; the rest of the scene goes as normal, same lines repeated) (According to the commentary, this was a sound mixing error when the Season 2 DVD was made.)
In the DVD commentary, they mention at the end of this episode that Squidward had a deleted line. After SpongeBob and Patrick hug him and run away, he would say "Ugly and smelly, two for one," but it cut due to the whole screen fading to blank at the end.
For the beginning, the giant calendar that SpongeBob is flung into by his bed from "Boating School" was reused.
Running Gag: The police giving a ticket to destroyed cars, tickets meters, etc. or they destroy it.
MY LEG: The marching band gets irritated with the stench of SpongeBob's mouth after they bump into buildings that they got thrown into.
If one looks closely at the title card, SpongeBob's hand can be seen.
The shot with SpongeBob playing the organ is a reference to The Phantom of the Opera.
The Ugly Barnacle might be a reference to the Hans Anderson's The Ugly Duckling.
Nickelodeon's "Breadwinners" has an episode with a same plot about stinky breath.
When SpongeBob talks to the blue woman in the red dress, the fish in the background change colors from blue to green to red.
When Patrick saw SpongeBob in his house playing the organ, SpongeBob has a mask on. After SpongeBob turns around and Patrick lifts him up, the mask is gone.
When credited as Animation Director, Edgar Larrazabal's last name is misspelled as Larrazabla.
At The Reef, SpongeBob and Patrick first sit in the front row. But later, when Patrick lifts SpongeBob, they appear to be in the middle row.
As Patrick speaks to SpongeBob about how ugly he got, he mentions that he doesn't have a sister. However, he does, as seen later in "Big Sister Sam."
At the Reef, when SpongeBob and Patrick get into the theater, it is in a wide-shot and Fred is at the end of the front row. However, when SpongeBob and Patrick pass him, he is at least two seats in and next to Dave.
At the Reef, when SpongeBob and Patrick get into the theater, it is in a wide-shot and Tom is next to the red fish, Harold. However, when SpongeBob and Patrick get to Harold, he is sitting nest to the Red-haired fish.
At the Reef, when SpongeBob and Patrick get into the theater, it is in a wide-shot and almost every seat has someone in it, but when SpongeBob gets to the front row, very few seats are filled.
At several parts in the episode, SpongeBob does not have the smelly breath cloud.