Moe's beloved bar rag, loomed as an ornate medieval tapestry, recounts its millennium-spanning life story. The tapestry was woven out of demon wool, so it could tell the future. It went from being a tapestry hung up in a building to a bar rag. And when the rag goes missing, the supposedly friendless Moe realizes that he has more friends than he thought, so Santa's little Helper gets the rag, and the rag says that it has never felt such love in its entire life. Meanwhile, Bart begs Milhouse for forgiveness after they get into a fight. Milhouse will only forgive him if he allow a tough man to punch him will Bart lose his fame and have to act like a loser.
At a town meeting Homer explains to the town why he doesn't believe in God even Apu, Ned and Reveland Lovejoy. Mayor Quimbcy tells him that he was suppose to lead them in the pledge of alligence.
The town meeting is taking place in Moe's tavern because the city hall is full of bedbugs. By convenience, the Springfieldians enjoy the bar to hang out with their friends, until they realize that the closest thing Moe had to a friend was the Bar Rag. They start mocking Moe for that, but he leaves the rag on the counter and leaves. The rag then starts telling his story.
His story begins in early medieval fronts on south France, in a miserable family strugling to even get food, when a duke (Mr. Burns) orders the Peasent's Wife (Marge) to weave a tapestry with his stories on it. On the way out, he kills some Sheeps, wich made their wool possessed, and insted of weaving the duke's life, she made exacly what would happens to the carpet through the years. The duke got impressed by the carpet, but decided to burn down the family house because that was not what he was expecting. on the way home, the duke's horse stumbled, making him fall down a mountain and getting hanged on a tree by said carpet.
The tapestry was then moved to a cathedral, where he gained some popularity, but vikings invaded the cathedral, and stole the carpet, wich was sold to arabs in exchange of jewels. The arabians used it to make the tent for an young persian king (Nelson), wich demanded constant entretaining from his wives (Wich none of them suceded to do), until one of them, a History teller (Lisa) managed to tell him a story each night for 1001 nights, until he and his guards fall asleep. she freed his other wives, and they took a revenge on him. his tent was undone and the cloth was taken to Spain, wich he was used in diferent maners (Most of them related to torture), But an artist, Michelangelo (Julio) used it to paint his masterpiece in a cathedral's ceiling. After the paint was done, the rag became useless. Later, they used the piece of cloth to make the Flag of a Confederate Nation, according to him "On the wrong side of history".
He was later used as an ingredient on a soup in the great depression and some years later, as a flag to an expedition to the top of Mount Everest, wich failed. the rag was then found by an Yeti and given to his son (Moe), who kept the rag until nowadays. The rag is sad, because after the great things he has done, he ended up as a bar rag, but when Moe was sleeping, a misterious hand stole the rag from Moe. In the next day, Moe gets worried about his rag and decided to ask The Simpson family for help, but he found the rag laying on a clean clothes basket. Marge then explained she realized how much Moe loved the rag and decided to wash it. Moe is happy in finding his rag, but Marge explained that everyone in their family was Moe's friend. Happy, Moe throws the rag away, but he gets "adopted" by Santa's Little Helper.
In a sub-plot, Milhouse gets angry at Bart because their friendship was all about Bart making jokes or pranks against him and decides to end the friendship. Bart gets crazy and desperate for Milhouse to accept him back, even asking Lisa for help, but Milhouse accepts their friendship back after Bart accepts being punched by Drederick Tatum.