Buddy is out hiking in the desert, scouring land for buried treasure with his metal detector. But the only thing he discovers is trouble... in the form of what a panicked Buddy describes as a ten foot tall space alien.
Mr. Ernst and the staff do a quick search of the area, but they find no evidence of the alien Buddy claims to have seen. Back at the lake, Melody finds Buddy, and suggests that maybe he fell asleep and dreamed he saw the alien. Buddy is upset that even Melody won't even believe him, and he stomps off. As Melody walks off the pier, she finds herself cornered by one of the mysterious aliens. She screams in terror and nearly runs into the lake.
Now Mr. Ernst has to deal with both Buddy and a very upset Melody, so he convenes another search party. Ted and Brad are both convinced that both sightings are bogus, while Lucy tells Danny that they may all be marks in an elaborate practical joke staged by Buddy and Mel. Danny seems amused by the goings-on, and hints that aliens may indeed be among us already. Mr. E gives his orders, pairing off the others in a new search while he heads off on his own.
Mr. E does his own kind of whistling in the dark as he wanders through the desert. A space suited figure scurries behind him, but he turns and sees nothing. Again, more rustling, but he sees no aliens. Now more than a little paranoid, Mr. E hightails it back to the ranch.
Mr. E finally returns to the ranch, but he finds the stable deserted. He is in a hair trigger state when he turns around to find two aliens"standing before him. Mr. E screams in terror and runs.
The Bar None is now in full alert. Mr. E, dressed in his civil defense outfit, directs a meeting in the lodge. His phone calls to the President and every branch of the armed forces has resulted in no assistance, so they must take it upon themselves to stop the impending alien invasion.
Lucy cautions Mr. Ernst that he is overreacting, that "there is a logical explanation for everything!" But Mr. E will have none of that. He enlists Ted as his second in command, and gives him authority second only to his. He has created a new ally for this war of the worlds.
The staff rigs up various booby traps on the grounds, such as garden stakes stringed together with jingle bells. As a precaution, teams move in roped-together pairs; Danny is tied to Mel, and Ted is tied to Brad. Danny and Mel inspect empty rooms, while Ted and Brad dig alien pits in the desert. Brad blows up at Ted, completely frustrated at the stupid plan they're all following.
Finally, dusk falls on the Bar None. The staff is hunkered down at the "Barricade", while Danny and Mel are manning the "Outpost". At the Outpost, the jingle bells are tripped. A terrified Melody tries to reason with Danny, but he leaves anyway to investigate the trip wire. Indeed, two space suited creatures are tied up in the twine, and Danny approaches them, gesturing with the universal sign of peace.
Melody runs back to the Barricade, screaming that the aliens have kidnapped Danny by taking control of his mind. The staff is all on edge, and the baseball bats come out. Lucy tries to calm them down, but a rabid Mr. E screams that she doesn't understand. An alien approaches and Mr. E instructs the staff to jam their minds with other thoughts. But before any blows are struck, the creature removes its helmet...and it is Danny.
The stunned and puzzled staff watches Danny bring out his two new friends, Lester and Boyd. It turns out that they are with the "Space Agency" and are conducting tests on a new space suit. They tried to explain their intentions earlier, but everyone they approached screamed and ran away. Lucy admonishes all of them for getting so caught up in the hysteria.
Later, Ted tells Danny that he called the Space Agency and they said no one named Lester or Boyd worked there. Danny looks panicked, but Ted tells him it was a joke.