Squidward arrives at the Krusty Krab as happy as ever because of his upcoming clarinet recital. He is repeatedly getting pummeled, such as Thaddeus' morning breath in his face, or getting the door slammed on him, but since his clarinet is safe, he is happy. But when Nazz Rechid comes to the Krusty Krab, and her new baby drools on the clarinet, he bursts with anger. He demands Mr. Krabs to give him a place to store his stuff, and Mr. Krabs gives him his Navy locker, and SpongeBob single-handedly cleans it.
He stores his toothbrush, while Squidward puts his clarinet in there, not risking it getting soiled before his presentation. While Squidward is going through his daily routines, he discovers SpongeBob is always doing something to the locker. In fear for his clarinet, he goes to see what happens, and leaves loose change on the floor when he was giving it to the customer. Just then, Mr. Krabs jumps out wildly and acts like a gorilla, scaring everyone away from the loose change he hears.
When Squidward crawls inside the locker, it is revealed SpongeBob had converted it to a whole room, and the second time he visits it, he finds his clarinet gone, and goes looking. He discovers a small door near the floor, and crawls through it, only to enter a mysterious forest, made of clarinets. He spots his, just before he is picked up by a large eagle, "The Keeper" of The Horned Forest or Clarinetland, who tells him to learn respect, and to grant peace to clarinets, and that a clarinet cannot be owned. In desperation, he claims he has learned respect and tries to escape, but the eagle, "The Keeper" does not believe him and swallows him.
Squidward then finds himself chasing SpongeBob for his clarinet, into a giant pinball machine, where Patrick in giant size says it is THE PRESSURE that is doing all of this, and then Squidward finds himself chasing SpongeBob, literally through space, and finally being back in the locker, and running off to his presentation. He then finds SpongeBob in his case, and runs from the stage, right before he gave the presentation, revealing he was giving him the clarinet.
When Squidward opens the drawer after SpongeBob expands the second time, the case can be seen inside, but it then reveals the drawer to be empty with the exception of the note.
There is an episode that comes later in the series called "InSPONGEiac," which has some similar events.
At the beginning of the episode, Squidward is riding his recumbent bicycle, but in "Boating Buddies," he said that he sold it to someone. So, this episode should take place before "Boating Buddies" or he got a new one. Furthermore, he had one in the movie.
This is the second appearance of the Alternate-Universe Squidward following "The Algae's Always Greener." In this episode, he is the reflection of Squidward in the mirrors. The alternate-universe Squidward in this episode, however, could be just an illusion. This is unlikely though, as the clarinets come out of the mirror.
This episode is said to have scared young viewers.
In Indonesia, instead of SpongeBob saying " I MEANT 2019●3-F! Sorry," SpongeBob says "I MEANT 2019●3-....Sorry!" It may mean SpongeBob forgot the letter or didn't want Squidward to know about it.
When Squidward says, 'You tell me, what in the Wide World of Sports is this place?', this might be a reference to ESPN's Wide World of Sports complex, located at Walt Disney World.
The way Squidward enters Clarinetland, using the small locker is similar to the way the characters of Narnia enter to the land of Narnia.
Squidward and SpongeBob tumbling through space to classical music is a reference to Stanley Kubrick's 2001: A Space Odyssey.
The title as well as the plot, is a reference to the 1865 book and the subsequent 1951 and 2010 movies Alice in Wonderland. It is also possibly a reference to the 1938 Looney Tunes short "Porky in Wackyland," directed by Bob Clampett, which features similarly surreal animation.
The Keeper has a voice that sounds similar to The Kurgan from Highlanders.
When Squidward throws SpongeBob into the bus and the bus says "FAR FAR AWAY", that is a reference to Shrek because there's a place in that movie called Far Far Away.
When Squidward tries to slam SpongeBob, SpongeBob escaped from Squidward's grip, then he laughs upside-down in a hole before it vanishes.
SpongeBob places his old and filthy toothbrush inside the locker next to Squidward's clarinet. However, later on, the toothbrush disappears and isn't seen for the rest of the episode. It is possible that it was relocated to one of the drawers inside the locker.
When Squidward hands a book of "Bikini Bottom Labor Regulations," Mr. Krabs grows hives, claiming he is allergic to it, but in the next scene where Mr. Krabs holds the same book, he isn't affected at all.
The suitcase is blue, however, at the end, it is purple.
When Squidward crawled through the hole, the note was gone.
When Thaddeus' breath punches Squidward in the face, his hat falls off, but when he gets back up, it's on his head again.
When SpongeBob with load of appliances walks past Squidward while he is giving change, the Galley Grub is misspelled as "Gally Grub."
Before Squidward opens the curtain to Clarinetland, he has his work hat on. After he opens the curtain, his hat is gone.
When the alternate universe Squidwards blow music at Squidward, he stands up briefly screaming. At this moment, he only had 2 legs instead of 4.