Its nighttime and stormy at the Bar None, and the kids are playing Pictionary. Ted is angry because Buddy and Danny can't guess his drawing and they lose to the girls. Melody suggests telling ghost stories. Brad says she hates ghost stories because she is never scared. Melody goes first and tells a story that Brad heard. Brad says she heard them all and it didn't scare her the first time either. Ted says maybe she doesn't get scared because their just stories, but if she heard something that really happened it would be different. Ted says he knows a real horror story, one he wish he didn't.
Ted says in 1863 his grandfather Jack was working in a saw mill and they had very poor working conditions. Multiple people were losing body parts and his grandfather wanted change. To teach him a lesson the mill owners cut his right hand off. The owners were found strangled. Jack was the prime suspect except that the killer used his right hand which Jack didn't have. Ted says the hand kept killing and its been passed down from youngest son to youngest son and he's the youngest son. Ted shows them the hand and Brad says it is a fake, but she is reluctant to touch it. She finally does and he grabs her and she screams. Brad says it isn't funny and Ted tells her it wasn't suppose to be it was suppose to be scary. Brad vows to scare him. Ted says it is impossible he's been hearing and telling ghost stories since he was 8.
Ted returns to his bunk and lies down. Danny reaches his hand up and grabs Ted's throat. Brad comes through the door wearing a hockey mask and carrying a hand saw. Ted doesn't flinch. Ted says she confused Freddy, Jason, and the guy from the Texas Chainsaw Massacre.
At the breakfast table, Ted finds a glass eye in cereal bowl. He says he loves that gag, but that's the problem its just a gag. Its funny not scary. He says its just startling someone. He says to really scare someone create an atmosphere that is real and put in a twist at the end. Mel wants to give up, but Brad will have none of it.
Ted comes to the girls bunk because Mel wants to speak with him. Mel asks him if he heard any stories about a headless cowboy. A cowboy found a family murdered at a ranch so he rode into town, but the sheriff didn't believe him and the cowboy was accused of the crime. They cut his head off and the cowboy now rides through the desert looking for a new head. Melody takes a cover off to show Brad's head covered in blood. Ted begins clapping and laughing. Ted tells them to give up and leaves.
Mr. E tells Ted a horror story about the previous owner of the Bar None. He went insane because all his employees were too busy trying to scare each other they didn't get their chores done. Lucy tells Ted and Mr. E a story. A hundred years ago, they found everyone on the ranch dead in their beds and all the doors and windows were locked from the inside. The mystery was never solved. Mr. E tells Ted to put the tools away in case it rains.
It is another stormy and rainy night. Ted is awake and hears a banging noise. He calls for Danny, but he isn't in his bed. He opens the door, but he doesn't see anything. He calls for everyone to come out, but no one does. He checks under the bed and in his trunk, but no one is in there. Ted tells them they win, but no one comes out. He remembers Lucy's story and figures out the killers must have come through the floors. He hears a noise under the floors and goes to run out and finds Mr. E. He screams not to kills him. Lucy comes in and says she shouldn't have told him that story. Lucy says the noise was the rake he left outside when he was suppose to put the tools away and the sound under the floor was her putting the hose away.
Lucy says Danny and Brad are putting tarps over the hay. Danny and Brad come in tease Ted about being afraid of a rake. Brad says Ted was right. They couldn't scare Ted, the only one that could do that was Ted himself.
Ted pops out of the water trough dressed like a mummy, but no one is scared. Brad tells him he confused The Mummy with the Creature from the Black Lagoon.