Queen Griddle cannot sleep, and so Sir Loungelot and Flicker travel to Slumberland to find a cure for her insomnia. To get to Slumberland, they ride counting sheep over a fence. There, they meet Mildred, the fairy godmother of Slumberland, who gives them pajama style outfits and tells them to not talk in the shush zones.
Flicker and Loungelot go to the Town of Great Sleepers, where they find Rip Van Winkle sleeping under a tree, having been asleep for 20 years due to drinking a glass of warm milk. Loungelot intends to use it to put Griddle back to sleep, but drinks it himself, and it has gone sour, as it is 20 years old. He spits it out and wakes up Rip Van Winkle. When Loungelot yells at him, Mildred gives him a fine that hits him in the head with a hammer.
Next they arrive at Morpheus Mattress World, run by the dream deity, Morpheus. Loungelot jumps up and down on a bed, until he jumps so high that he grabs onto a wooden beam on the ceiling. His weight causes it to break and collapse the entire building. When Loungelot yells "Raging plague!", Mildred puts a cage on his head.
Next they arrive at Mr. Sandman's castle. Mr. Sandman is Slumberland's most legendary figure. When they knock on the door, he tells them that he is trying to sleep. When Loungelot yells at him, Mildred appears, and shoots a beam of magic at Loungelot, but misses and hits the castle instead, collapsing it as it is made of sand.
Loungelot takes some of the sand, and rides away with Flicker back over the fence. However, Loungelot's sheep stops at the fence, sending him flying into a tub and causing the sand to melt. The sheep drink the water and fall asleep.
However, Flicker comes up with a plan. He tells Loungelot to tell Griddle about their quest exactly as he remembers it. Loungelot tells his story, overdramatizing it and boring Griddle to sleep. Flicker says that it was the soothing sound of his voice that made her fall asleep, and so King Allfire says that Loungelot can stand by Griddle's side whenever she can't sleep, all night if necessary. At this, Loungelot faints.