When an argument between Chester and A.J. ruins Timmy's sleep over plans, he has to use Cosmo and Wanda to appear at both his feuding friends' sleepovers... at the same time.
Up in his treehouse, Timmy is making preparations for a sleepover party with his best friends, Chester and A.J. Before they arrive, Timmy instructs Cosmo and Wanda to wish up all the necessities they would need to watch "The Crimson Chin meets Crash Nebula", a special airing on television involving their favorite comic book heroes. Moments before Chester and A.J. arrive, Cosmo finds an ant and names him Carl, but the ant is squashed and killed when Cosmo drops his magnifying glass on it. Cosmo mourns the loss of the ant while Chester and A.J. arrive.
Chester and A.J. start to show off their sleeping bags and costumes. A.J. has a Crash Nebula costume, while Chester has a Crimson Chin costume. They both begin to argue over which superhero is better, which cumulates into a full blown nerdy slap fight between them. Timmy asks Cosmo and Wanda to break up the fight, but Cosmo is too busy mourning Carl's untimely death for them to be of use. A.J. and Chester's fighting causes them to fall out of the tree house. After a hard landing, Chester and A.J. both part ways, but not before each of them tells Timmy to come to their own slumber party instead of the other's or else he will not be considered their friend anymore.
Stuck having to choose between his two friends, Timmy decides to attend both slumber parties at the same time using his fairies' magic. While plotting outside the Dimmsdale Dump, Cosmo spots a bee and names her Cindy, but she too is killed when she is swallowed by a bird, causing Cosmo further distress. Timmy and Wanda ignore his stupidity and poof themselves to A.J.'s House. While inside his friend's high class residence, he is served fine food and praised by A.J. for selecting him over Chester. Timmy goes to use the bathroom, and while inside, has himself poofed to Chester's Trailer. Chester's slumber party does not look as promising, since the television is receiving nothing but static, so Timmy uses Chester's bathroom and returns to A.J.'s house.
Timmy and A.J. go out to a tent called "Sleepover Paradise" in his backyard where A.J.'s Dad has set up a big screen television and everything for them. Unfortunately, he also put a parental block on the television, preventing Timmy from watching the Crash Nebula/Crimson Chin special, or anything else violent and non-educational for that matter. While A.J. looks in disbelief, Timmy slowly backs out of the tent and then quickly wishes himself back to Chester's. The situation there has not improved either, as Chester's dad is still trying to fix their TV, and the only thing to eat there "tastes like cat food". Timmy wishes himself back to A.J.'s again, and sees his friend leaning against the parental blocked TV in disappointment. Timmy decides that both his friend's parties are very bad, and that he has to find a way to get them both to be friends again so they could watch the TV special at his treehouse.
After overhearing oddly specific advice from the educational program on A.J.'s television, he decides to make his friends work together to save his life. Timmy returns to the Dimmsdale Dump, where he calls A.J. and then Chester, telling them that he was in mortal danger and needed their help. Timmy tells Cosmo and Wanda to pose as junkyard dogs. After Timmy goes to hide though, Cosmo spots a cat and tries to befriend him, calling him Jimmy. The cat runs away and Cosmo gives chase, not wanting another animal to come to harm by running away from him. Wanda reluctantly gives chase to Cosmo, neither them nor Timmy are aware that there are real junkyard guard dogs in the vicinity.
Chester and A.J. show up at the same time to the entrance of the junk, each clad in their respective superhero costumes. Inside the dump, Timmy spots the real guard dogs heading toward him, and thinks Cosmo and Wanda are doing a really good job at acting, until he spots his fairies elsewhere being distracted by Jimmy the cat. While backing away from the approaching dogs, Timmy slips and falls from the pile of junk he was hiding atop of, causing him to fall through several items such as a cat suit, gravy, and air fresheners with "scent of mailman". Timmy lands, now clad in a cat suit, in front of an elaborate sign display which says "Eat me!". Just as the junkyard dogs close in on Timmy, Chester and A.J. show up and fight the dogs off using several features from their costumes, such as Chester's inflatable butt and A.J.'s air horn. The dogs run into the overinflated Crimson Chin butt and are bounced off and sent flying out of the dump. Chester and A.J. shake hands and rekindle their friendship.
Although they missed the Crimson Chin/Crash Nebula TV special, Timmy does not care because the show that Chester and A.J. put on was better. They return to Timmy's treehouse for their slumber party. While showing off the features of his cat costume though, Timmy manages to attract the junkyard dogs again, and they jump into the tree house. Cosmo chases Jimmy the cat again and watches him get run over by a truck, a horse carriage and a train. But because he has 9 lives, he wasted 3 lives and had 6 lives left. Cosmo then suggests Chester's cat food like dip, but Jimmy returns and shreds Cosmo's face to ribbons. Then he asks for a band-aid and Wanda says she would be insulted if he didn't. Cosmo remarks that he would be bleeding if he didn't like Carl. Then realizing Carl, Cosmo starts mourning again and says, "I want my records back!".