The babies get invited to a costume party and Nanny gives them a box of old costumes for them to pick from; Gonzo goes through several and has trouble deciding which one to be.
The babies declare it Nanny's Day and give her the day off while they take over the cooking and cleaning, and the most important job of finishing her big surprise.
The kids use the examples of The Ugly Duckling, Beauty and the Beast and Cyrano de Bergerac to show Piggy that she can't judge a book simply by its cover.
The kids make a 'story box' that follows the story of a brave party led by knight, Sir Kermelot, who must slay a dragon in order for Piggy to rightfully claim the throne.
Scooter wants to be cool, so Gonzo suggests four careers he could try - a test pilot like Top Gun's Maverick, a comedian like Gallagher, a rock star like Bon Jovi and a superhero like Clark Kent/Superman.
When the Babies see a news bulletin on TV about how Prince Charles and Princess Diana cannot find a nanny for their two sons, they soon think all the nannies on Earth, including theirs, have been abducted by aliens.
The kids play with their old junk, while searching for Fozzie's teddy bear and Piggy's bracelet that are missing. Gonzo believes that closet trolls took them but the kids don't believe him - at first.
The kids play Star Trek: TOS and mistake their broken air-conditioner for a sign that they're about to crash into the Sun. Inspired by the movie the African Queen, Scooter takes his friends on a jungle cruise to cool down.