Peter and the guys are in line to see a horror movie: "Maniac Pope 2". The movie is a maniac pope killing teenagers.
After the move they talk about how bad the movie was. Peter says they can write a better movie.
Stewie is eating breakfast when Brian shows up with glasses on. He immediately starts acting snooty. Stewie calls him out comparing him to people who poop in the shower. Cut to Meg in the shower.
The guys are at the Drunken Clam discussing movie ideas. Joe suggest a movie title, "Cereal Killer" about a guy who kills people who eat cereal. Peter questions if God is a "serial killer". Quagmire suggests going someplace scary to get inspired. Joe suggests the abandoned Quahog Asylum. Peter is immediately scared because it's supposed to be haunted by a hook-hand ghost.
They travel to the asylum on a rainy night. They investigate a short while then sit around a table. Peter wants to write a typical teenage horror movie.
Stacy (Lois) and Richie (Peter) are making out at Make-Out Point. Richie wants to go all the way, but Stacy is scared because there is a killer on the loose - a big rabid cat scratching people to death. The cat shows up and claws them to death.
Cleveland wants to write a zombie movie. A guy wakes up in the hospital only to discover it's abandoned. With all the destruction around, he only notices the flickering florescent bulb and changes it. No zombies show up.
Quaqmire wants to write about something that isn't supposed to be scary becomes scary, like an evil doll. Peter instead suggests an evil bar of soap.
Cleveland is in bathtub when he begins to wash with the soap. Peter finds him dead with the soap in his mouth. Backing up he slips on the soap and dies. Quagmire dies too after checking on the other two.
After sharing a few ideas, they start to get scared and get up to leave. All the doors are locked. There's a scream which ends up being a viral video Peter got of a sheep screaming. Joe discovers that there are bars on the windows, but says they can get out of there via the duct system.
Stewie and Brian are at a coffee shop. Brian uses his glasses to flirt. Stewie can't stand it. he makes a vow to destroy the glasses.
The guys go through the duct system and end up in the basement. Joe's cell phone doesn't work.
Stewie takes Brian to a spa. Chris is supposed to break into Brian's locker to destroy the glasses, but locks them all in the sauna instead for the entire weekend. Mayor West finds them.
In the asylum basement, the guys hear footsteps. They see a guy with a hook arm in the shadows. They run out, but when they get to the car they realize it's four of them versus one crazy hook-handed guy. They run back, start pounding on the guy, eventually killing him. Turns out he was the building's caretaker.
Quagmire wants to report it to the police. Joe says no because he can't go to prison because of what they do to cops in prison. Cutaway to prison where a guy asks Joe all sorts of questions then tells him a group of them are going to kill him later.
The guys bury the body. Make a vow to never speak of it again. As they finish, they realize the guy had a car. They bury the car.
The next morning, Peter is all paranoid with everything Lois says, thinking she's making reference to the events of the night before. On the radio, a John Mellencamp commercial comes on that sounds like it is referencing the murder.
Stewie takes a bat to Brian who is reading a newspaper. When he puts the newspaper down, Stewie bashes him in the face. The glasses break.
At the Clam, guys talk about the killing. Joe talks about the Mellencamp commercial. Quagmire denies knowing what the guys are talking about. All of them are paranoid. They individually go back to the asylum to frame each other. As they are about to attack each other with their shovels, Peter says that this whole event would make a great horror movie.
The movie is made, titled, "Cereal Killer". John Goodman plays Peter. After it is over, they realize that their movie was as bad as other horror movies and agree that writing a horror movie is hard. As they are walking they see a newspaper box with the headline that the missing janitor was a KKK member. They feel justified in killing him. At the same time Peter says he's glad the janitor is gone forever, the hooked hand breaks through the dirt as does a car door.