On December 31, 1999, a man in a chicken suit asks Peter if he wants a coupon, but Peter refuses, recalling his own time that he got a bad coupon from Ernie the Giant Chicken and started a fistfight that caused casualties in many places of Quahog. After when Peter refuses for a coupon, the man warns Peter that the world will end because of Y2K. Peter locks his family up in their basement, despite his family's protests to attend a local New Years party. While the Griffin family spends the next few minutes inside their basement wearing hazmat suits, a nuclear holocaust occurs at midnight because of Y2K, destroying much of the world and mutating, injuring, or killing many of the surviving citizens of Quahog, however, the Griffins remain free from mutations. As the family look for survivors, they soon discover that Joe has been melted into his driveway, his son Kevin has been vaporized, while Quagmire and Cleveland have fused together and are now called "Clevemire"; with the former wishing to be called "Quagland", and Tom Tucker and Diane Simmons have eaten Tricia Takanawa. Starving for food, Peter immediately eats all the dehydrated meals, without adding water. Becoming hungry, Peter recalls that the snackfood Twinkies are the only food that can survive a nuclear holocaust. Desperate, the family travels to Natick, Massachusetts, in hopes that the Twinkie factory has survived. On the way, Stewie is exposed to nuclear waste and soon mutates into an octopus-like creature. Upon their arrival at Natick, they discover the factory is still standing, and in perfect condition. Expecting to be able to live off of the snackfood, they decide to establish a town, dubbed New Quahog. Deciding to establish a city government, Peter proclaims himself mayor, because it was his idea to seek out the factory. Accepting his argument, Joe and Clevemire join him to form a ruling council. One year later, New Quahog has become a fresh new community, complete with houses and wells. The survivors have joined the building of New Quahog, and through teamwork, everyone is getting along fine. Peter has successfully reigned as mayor, despite many mistakes, such as giving people jobs picked out of a hat rather than based on the person's skills. However, when Brian points out how New Quahog is a peaceful place with no violence, Peter realises that they are completely defenseless and uses the pipes from the city's water irrigation system to make guns and other weapons, outraging the citizens. Meanwhile, Stewie, who has "gained girth" according to himself, as he continues to transform into an octopus, suddenly lays hundreds of eggs in the basement of their house.
Despite Peter's insistence that he is fit to continue to be the leader of the new community, the townspeople run him out of New Quahog, and his family follows him. The citizens proceed to burn the guns Peter had made with the pipes in the middle of the town square. As they throw the last gun onto the pile, hundreds of newly spawned Octopus-Stewies hatch, and begin to destroy the city, with the townspeople unable to protect themselves from the mutants, due to burning all the guns. As the family walks away, oblivious to the town's destruction, they decide to continue to aCarvel factory in Framingham, Massachusetts. The episode then ends in a live-action parody of Dallas, in which Pamela Barnes Ewing (Victoria Principal) wakes to find her husband, Bobby (Patrick Duffy), in the shower. Surprised to see her in the bathroom, Pamela begins telling him about the episode, which was apparently a dream, thus retconning the entire episode. Although after she tells him about the dream, her husband responds by asking "What's Family Guy?", with both then proceeding to turn and look confused directly at the camera.