After one of Bart's pranks causes the gas pipe to explode, the Simpsons have to find a way to pay the $900 gas bill. They try to use their retirement fund, but when Homer carries it outside, it falls through the ground deep to the center of the Earth, due to its super-heavy weight. Next Marge decides to sell her grandmother's priceless Civil War doll. When they try to sell it at "Cockamamie's", a nostalgia store in the mall, a store clerk named John informs them that the "priceless" doll is actually a Liquor Lad whiskey bottle from the 1970s (thus revealing that Marge's grandmother Bambi had a secret drinking problem). In spite of the disappointment, the Simpsons find John witty and invite him over to their house.
At their house, he seems to enjoy kid things like Itchy & Scratchy. Then, he and Homer dance to a record, where he calls Homer "the living end". The next morning Homer tells Marge about how much he likes John. Marge tells him that not only does he probably not have a wife and most likely doesn't go out with women, but that John is homosexual, causing Homer to go into a homophobic state. Marge tells Homer that although he has these tendencies, she still likes him, and he has invited the family for a drive, but Homer refuses to go. The other family members enjoy the drive, however, and when they return Bart shows Homer a zapper gun John gave him, which Homer remembers seeing before.
Later that day, Homer notices that Bart is showing strange tendencies such as wearing a Hawaiian shirt that he says "came out of the closet," choosing cupcakes with pink icing over chocolate icing, and repeating some of John's phrases such as "Homer, you are the living end". In bed, Marge notices that there is something worrying Homer. He tells her that Bart is becoming gay, which Marge does not believe. The next day, Homer finds Bart dancing to "The Shoop Shoop Song (It's in His Kiss)" by Betty Everett while wearing a wig. Homer finds John in the kitchen with Marge and some cactus candy, and tells him that he is making Bart gay, and that he's going to try to fix him.
Homer then drops Bart off near a billboard with two women pillow fighting advertising Laramie 'slim' cigarettes. He comes back two hours later and Bart tells him that he wants a cigarette. Homer sees this as a start and asks him what kind. Bart says "anything slim" which tells Homer that his plan failed. He then takes Bart to the Ajax Steel Mill to show Bart real men hard at work and make Bart more manlike, but to Homer's dismay, the mill's manager and all his workers are gay, and at breaks they turn the mill into a gay nightclub. Homer goes to Moe's Tavern and talks to Barney and Moe about this. They suggest that Bart goes out hunting with Homer. He grabs Bart out of John's pawn shop, and he takes him hunting with Barney and Moe. On the way, Bart tells Homer that he thinks the idea of four guys alone in the woods all night sounds kinda gay. They wait in the woods for hours with not one sight of a deer, so they leave. Homer is depressed that he wasn't able to change Bart, but Moe drives them to the one place with animals even remotely close to deer: Santa's Village.
Back at the Simpsons' house, John wonders where Homer and Bart went, and Lisa tells him that they went hunting, but John knows that all the deer have migrated at this time of year and the only deer around in the winter are reindeer. At Santa's Village, the group smashes through the gate and finds some reindeer. Homer insists that Bart must kill a reindeer, but he refuses, to Homer's disgust. Homer turns around and says he expects to see dead reindeer when he looks back again. He hears a shot, but Bart, reluctant to shoot the reindeer, fired into the air. However, the noise from the shot causes the reindeer to go nuts, and they try to attack the group. Barney and Moe hide under the food and water troughs, while Homer and Bart are surrounded by the angry reindeer. Homer sacrifices himself by holding Bart above his head while he is tenderized by the reindeer until a small little robot Santa Claus scares them away. It turns out to be the work of John, who had arrived in the nick of time and had been controlling the robot all along, knowing that they would be scared off by their "cruel master" Santa Claus. Homer now realizes that gays are not sissies after one of them (John) has saved his life, and Bart now realizes that Homer thought he was gay.
Before the credits roll, the episode is dedicated to all the steel workers of America, telling them to keep reaching for that rainbow.