The organizers of an independent film festival that has gotten too big for the small mountain town it is being held in (think Park City, Utah) decide they need to move to another small mountain town (enter South Park, Colorado). The moment the film festival banner goes up, the town becomes overcrowded. Mr. Garrison assigns his students the task of going to see one of the independent films and writing a paper on it. Chef has set up a stand to sell his cookies "Fudge 'Ems", "Fudge This", "Go Fudge Yourself", "I Don't Really Give a Flying Fudge" and "I Just Went and Fudged Your Momma". Stan goes to see an independent film with Wendy and the content is shocking to Stan. Meanwhile in the bathroom, Kyle believes he has heard the call of Mr. Hankey. At the festival, celebrities such as TV's Fred Savage begin to arrive, as the organizers' plans to destroy South Park, like they did Sundance are revealed. With his fudge not selling, Chef changes his recipe over to "Chocolate Salty Balls". Chef sings about his balls as the boys consider going into the sewer, when Kyle again hears the call of Mr. Hankey.
The boys navigate the sewer in search of Mr. Hankey. When they find him, Mr. Hankey calls upon them for help; the overcrowding caused by the film festival is having a devastating effect on the sewer system of South Park. The boys interrupt the start of independent film to plead Mr. Hankey's case, but the movie people interpret Kyle's pleading as a pitch and Cartman sells them the rights. In the meantime, the people from LA build a "Hollywood Planet" restaurant on what was the site of the old library. Wendy and Stan go to see another independent film; this one is titled "Me & Mr. Hankey" starring Tom Hanks and a monkey they call "Mr. Hankey". Kyle brings Mr. Hankey to the surface, to try and get his message out.
The town, the children and Chef realize that they have sold out. Kyle brings Mr. Hankey to the organizers on to show them a dried-out piece of crap. Mr. Hankey makes a death bed confession to Kyle. At the hospital and on life-support Mr. Hankey barely holds on, but he starts to become energized by one of Chef's "Salty Chocolate Balls".
When his pleas aren't heard and thoroughly energized by the Salty Chocolate Balls Mr. Hankey reeks havoc on the film people a la "The Sorcerer's Apprentice" segment of "Fantasia", only with lots of sewage instead of water.
Kenny dies when people exiting a movie theater trample him to death.