In the Forman basement, Kelso, reading a UNICEF pamphlet which says that 13 cents can feed a child, says that living in Africa must be great. Fez asks what Halloween is, Jackie explains about the costumes and candy; Fez is amazed. They wonder what they should do to have some fun; Jackie says that her church is doing a haunted house. Kelso says that they should go see the Texas Chainsaw Massacre. Eric suggests that they go to their old grade school, which burned down, and tell ghost stories. Fez is still amazed about the free candy. Donna asks how the school burnt; Jackie says it was arson. They all look at Hyde, who claims that he was out of town that week.
At the door of a house, Fez, wearing a Batman costume, rings the doorbell. The gang stands behind him, looking bored. A hand drops an apple into his bag, and Fez asks, "Where's my candy you son of a bitch?"
[Scene change: Eric and Donna dance across the screen.]
In a movie theater, the gang watches a movie; Donna comments that she likes the girl on the screen and hopes she lives; she and Eric both flinch, and then Donna comments, "oh, well..." Kelso has his hands over his eyes; Jackie says someone should just shoot the guy - it's Texas so everyone has a gun; Hyde says that the girl deserved to die because she had sex, Fez is upset that the girl died just as she was about to take her shirt off.
At the Forman back door; Kitty gives kids raisins for Halloween; Red says that he hates Halloween, Kitty reminds him of the party they had when their first moved in and remembers going into the living room, Grandma Forman is there. Red and Frank come in with beer and they joke together. Kitty asks Red for some help; she wants to get him away from Frank, but Red says that he and Frank are going to the garage to get drunk. The phone rings and it's the doctor; Kitty is very happy about the phone call, but then tells Grandma Forman that it was a wrong number. Grandma figures it out though, and asks who the father is.
[Scene change: Jackie does the twist.]
At the school, the gang looks around the burned out school. Eric tells Fez that a man died in the fire, and his ghost still roams the halls. Kelso seems scared, and then runs out when a window shuts on its own, pushing Jackie out of the way. Jackie's upset about that, but Kelso claims that he was trying to protect her. Jackie leaves... she and Donna go out to the hallway; Jackie says that Kelso should have protected her, but Fez did instead.
[Scene change: Jackie dances across the screen.]
At the school, Eric is telling ghost stories, but Hyde doesn't find them scary. Fez says that he's seen a man being hung from a tree and Eric's story wasn't scary. Fez says that you can tell that the story isn't scary because Kelso didn't run screaming from the room. Eric tries to tell another story but they just make fun of him. Donna and Jackie come in with the scariest thing that they found in the Principal's office - their permanent records.
[Scene change: Kelso jumps up towards the camera.]
At the school, Kelso looks through the records; Hyde grabs Donna's and reads that she couldn't keep her clothes on in kindergarten. Kelso reads Hyde's - that he has a high IQ, but is a real troublemaker; Hyde grabs it and reads about how he destroyed another girl's diorama in 2nd grade, then says he didn't do it. Eric admits that he broke it because hers was better than his so he had to do it. Hyde says that that's when he got pegged as a bad kid, and Eric ruined his life. Jackie points out that with an alcoholic mom and absent dad, he was bound to go bad at some point. Hyde reads Jackie's file and is about to tell her middle name but she attacks him; after she's done attacking him, he sits up and says that her middle name is Beulah.
[Scene change: Jackie jumps up towards the camera.]
At the Forman front door, kids come trick or treating; Kitty says they're cute but Red and Frank scare them away. Kitty's not amused. Kitty tells Red to imagine how he'd feel if they were his kids; he simply says that he doesn't have kids. Kitty tells him that she's pregnant, and Red's response to that is, "Oh no, ...oh crap."
[Scene change: Eric falls towards the camera.]
At the school, Fez says someone took his last box of sugar babies, then finds that he was sitting on them. Eric and Hyde glare at each other; Hyde is angry that Eric didn't take responsibility for ruining his life; Kelso says it's Halloween so they shouldn't fight - it's time for peace on earth and good will toward men. Kelso tells them a secret from his file - it happened before he moved there: when he was in first grade he used to wear a red cape. Eric says that he and Kelso met in first grade, then realizes that Kelso repeated first grade. Kelso says it's because of cursive writing, and he might have killed the class bunny. Kelso says that it's sucked living a lie pretending to be a year younger than he really is. Hyde is angry because Kelso could have been buying them beer all this time. Hyde says that Kelso is dead to him. They all advance towards him saying, "beer, beer..." like zombies. Jackie defends him, saying that Eric is worse; then Donna calls Jackie Beulah, Jackie tells that Donna kissed Hyde; Donna says that Hyde kissed her, then tells that Jackie said Fez is a better kisser than Kelso. They all start to argue; Fez says that the permanent records are tearing them apart. Jackie says that they have to destroy the records. Fez says his sugar babies are gone again; Hyde hands them over
[Scene change: Fez dances towards the camera.]
In the Forman driveway, Red apologizes for what he said, saying that he was shocked; Kitty says she was shocked too but she said 'oh good' and 'yay.' Red says that once the news sunk in he was really happy; and things will be great. Frank comes out with a funnel so they can drink beer faster; Red tells him to go home. Kitty tells Red that he's maturing; Red admits that Frank's been getting on his nerves..he's an ass, and he's dumb...he's a dumb ass! He and Kitty dance and kiss in the driveway. Red says that he's grown up a lot since then, then chases some kids off who were throwing eggs.
In a field, the gang is digging a hole to bury the permanent records. Jackie complains about being cold; Kelso says that they have to do it this way because the records have already survived a fire. Eric says that they should never speak of this night again; Donna says except for the part about Kelso being old enough to buy them beer. They all agree but then Hyde says "Beulah," and Jackie starts hitting him.
[End credits: In the field, Hyde comes and lays flowers on the grave of the records; a hand shoots up out of the ground...he wakes up and eats stolen sugar babies.]