Flicker is polishing Excaliburn for Allfire when Sir Loungelot calls him. Flicker leaves Excaliburn in the room to go and floss Loungelot's teeth. When he returns, Excaliburn is missing. Fearing he lost the sword, Flicker polishes a rock so it looks like the sword in the stone, hoping he'll find the real sword before anyone notices the difference.
Unfortunately, it is the time of year in which Allfire pulls the Excaliburn from the stone. As the fake sword is part of the fake stone, Allfire is unable to pull it out, and seemingly loses the right to rule as king, plunging Camelhot into Chaos as the dragon knights and the Chancellor fight over who gets to be king next. Allfire goes to see the Lady of the Lake, but has trouble finding her (instead talking to the Princess of the Pond, the Female of the Fjords, the Babe of the Bay the Wench of the Whirlpool, and the Dame of the Dam).
The sword has not been lost, but stolen by Count Geoffrey, who is currently using peasants to hold up the ceiling of Castle Threadbare. Unfortunately for him, he left his nail clippers in Flicker's room. Flicker finds them and realizes he stole Excaliburn, so he and Princess Flame disguise themselves as peasants to go to Castle Threadbare and get Excaliburn back.
Flicker is taken to a lineup of peasants to be used as ammunition for Geoffrey's catapults. Flame finds Excaliburn, but Geoffrey appears and challenges her to a duel. Flame fights Geoffrey with Excaliburn, and has the upper hand before defeating him when she tickles the peasants holding up the ceiling, resulting in a large chunk of concrete falling on him.
As Evil Knight 3 catapults Flicker into the air, Flame rides a cart out and catches him. They tell the dragon knights that whoever catapults a stone the farthest shall be king, so that they catapult it towards Allfire, until they reach him. Flicker sticks Excaliburn back in the stone, and Allfire pulls it out, regaining the title of king. Allfire leads the dragon knights back to Castle Camelhot just as Geoffrey is about to invade, and he and the Evil Knights run off.
Allfire tells Flicker to polish Excaliburn, while Loungelot practices catapulting the stone for next time.