When a fire engulfs Bart's new treehouse, Homer is pinned beneath an ice sculpture. Santa's Little Helper fails to help him and flees instead, leaving Snowball II to rescue him. Homer starts to hate the hound as a result, but has second thoughts when Santa's Little Helper becomes a mascot for Duff afterwards.
Bart and his friends are having a secret club meeting in the treehouse, when they realize Lisa and her friends are also having a meeting. The boys then plan to listen in on the girl's conversation and they hide a tin can telephone in her room. However, when Bart jokingly imitates Marge's voice through the phone, the girls discover the phone and begin to tug on it. The boys also tug on it and the treehouse is demolished.
Homer and Bart choose to build another treehouse but their plan fails when they mess around. Marge calls the Amish and they rebuild the treehouse brilliantly. Bart then holds a party to celebrate his new treehouse; but disaster strikes when it bursts into flames. As the guests flee from the treehouse, an ice sculpture collapses on Homer. Santa's Little Helper is also in the house and Homer attempts to persuade the hound to rescue him; unfortunatley the canine flees from the house, taking a roasted chicken with him.
Snowball II climbs up the tree and saves Homer, leaving Santa's Little Helper in disgrace. Homer declares the cat a hero and throws Santa's Little Helper out of the house. The dog is discovered by a photographer, who takes pictures of him and Santa's Little Helper is made the new Duff mascot. Meanwhile, Homer is interviewed and he claims he does not have a dog.
Santa's Little Helper's name is changed to Suds McDuff and is instantly an outrageous sensation with the public. The Simpsons visit the Duff Boss and are about to be paid when Santa's Little Helper's original owner appears and he reclaims the dog, using the video footage of when Homer disowns Santa's Little Helper on the spot as evidence. As a result, the former owner takes the dog away along with the money, and Homer cries out of regret of saying such a mean thing on TV. The Simpsons want to get the dog back so they make a plan. They visit Duffman and convince him to help them. He accepts and leaves the Drunk Help Building where he is teaching at.
During a Duff Beer publicity event at the beach, Homer pretends to be drowning. (He is really floating on a keg of Duff Beer). Santa's Little Helper is to scared to help Homer; which surprises the public. Duffman tries to help Homer but is also to cowardice and he stays on the beach. Meanwhile out at sea, Homer is attacked by a giant shark; who bites into the beer keg and gets drunk. The drunk shark floats onto the beach and is declared the new Duff Beer mascot. Seeing that Santa's Little Helper is no longer of use to him anymore, his former owner allows the hound to go back to live with the Simpsons.