The boys are riding their Big Wheels down the street when the pass by a house that has just been moved into. They stop and a boy comes to the door and asks them if they are going to be his new friends, to which Cartman responds "no." The boy is wearing a mask and tells them that he has just moved there with his dad, who wanted to get away from it all by moving to a town filled with hicks who don't know anything. He introduces himself as Blanket and wants to know if the boys want to come inside and play. Cartman informs him they are in the 4th grade and don't hang out with little kids. Blanket tells them they have arcade games inside. The boys go inside and find the house is filled with toys and games. Blanket tells them that the toys and games are all owned by his father. He takes them out to the backyard to meet his father, and the backyard is filled with a plethora of games, rides and animals. Blanket's father appears riding a train. His father's fake mustache keeps falling off as he approaches the boys. Blanket almost introduces his father by his real name, but his father stops him in time to give his as Michael "Jefferson." Kyle wonders what has happened to Michael's face, Stan figures he must have been a burn victim or something. Michael invites the boys to come and climb his "Wishing Tree," which he sings a song about. Michael has the boys go and get all the kids to come over and play. The house and backyard are loaded with children. Michael gets the kids to join him on his train and join him on a journey. Cartman has become enamored with Michael and starts sucking up to him. Kyle sees that Blanket is injured and when he can't get Michael's attention he attends to the injury himself. He asks Blanket about his family and Blanket tells him his doesn't have a mother because he was "made in a laboratory." The boys are going home and Cartman is expounding on the virtues of "Mr. Jefferson" and all of his neat stuff. Kyle on the other hand feels sorry for Blanket, since he father seems like he would rather be like a kid rather than raise a kid. Cartman warns Kyle not to screw up this good thing they got with "Mr. Jefferson." Stan returns home and tells his parents about the new neighbor. His mother decides that since the Broflovskis and Stotches are coming over for dinner, she might as well invite "The Jeffersons" as well. Michael attends the dinner and he tells the parents some of his views on children. Blanket's face is still covered which makes it hard for him to eat anything. Cartman comes to the door and accuses Stan of bogarting "Mr. Jefferson." Randy asks Michael how he feels about the Kobe Bryant trial. Michael thinks it's wrong what the police do to rich black man. At police headquarters they've identified that "Mr. Jefferson" is rich and black and they begin to execute their standard procedures in such cases. Meanwhile, late at night in Stan's bedroom "Mr. Jefferson" appears at his window dressed as Peter Pan. Cartman arrives and is jealous of "Mr. Jefferson"'s presence there. Then Kyle arrives with Blanket, who he found in his backyard and his father isn't at home. Stan tells him that Blanket's father is in his room. Michael tells the boys that he and Blanket can't go home because there is a scary monster there. Stan agrees to let them all sleep over. Everyone gets into Stan's bed and Cartman takes the position next to "Mr. Jefferson." Suddenly Stan screams when he believes he has had a bad dream involving Cartman and "Mr. Jefferson" sharing an intimate moment.
Meanwhile the police are in the "Jefferson" house planting cocaine, pubic hair and blood spatter in an attempt to frame the wealthy black man. Stan's parents find "Mr. Jefferson" in bed with the children. Stan's mother forbids the boys from going back to the "Jefferson" home. Michael and Blanket return home and the police are ready to execute their plan, but when the police sergeant sees the pair he believes that they are white and he aborts their plan. The police sergeant throws up at the idea that an innocent man could go to jail for a crime he didn't commit. Later the boys are passing by the "Jefferson" home and Kyle sees Blanket in the window. Kyle asks him if he would like to learn how to chop wood. Michael then appears at the window telling them the Blanket would rather play than do any real work. As an example he shows them how Blanket can fly by dangling him out of the window. The boys realize they've got to get Blanket away from his father. Michael meanwhile tries to console Blanket by playing a game where he takes Blanket's nose. It almost works until Blanket does the same to his father; only in his father's case the nose comes off. Blanket runs away. The police sergeant returns home and tells his wife he is quitting the force, but rekindles the flame that will get him to continue framing rich black people.
Cartman goes to the "Jefferson" home and tries to get in. Inside Michael is on the phone to his doctor, he is literally falling apart. Stan and Kyle get Kenny "who finally gets to do something" to substitute for Blanket, while they get him out of the house. The sergeant is back on the job talks to the police department in Santa Barbara who give him compelling evidence that his "Mr. Jefferson" is the wealthy black man that manage to constantly thwart their plans to frame him. Cartman is still trying to get "Mr. Jefferson" to answer his door as Stan and Kyle prepare to get Blanket out of the house. Michael finds them and the hideous appearance of his head (like a zombie from the "Thriller" video) causes the boys to run. He runs into Blanket's room and finds Kenny, who he throws up into the air and kills when he goes through the ceiling. The boys get outside and Michael follows them, only to be greeted by a large contingent of police outside his home. Cartman tries to come to his defense, but it is Kyle bringing to light the obligatory lesson that "Mr. Jefferson" needs to grow up and raise his child, rather than spending all of his time acting like one. "Mr. Jefferson" agrees and decides to give up all his money, which will keep the police off his back, and do things the right way. Michael sings about the "Power of Change" as the credits roll.
Kenny dies when (as mentioned above) Michael throws him upwards through the ceiling.