The episode begins with Lazy calling for help and waking the village. Papa Smurf notices this and along with the other Smurfs, gangs up on his house. Hefty says it sounds like he needs help. Papa Smurf is the first to enter and tells lazy to wake up. When he does, he’s told he had a nightmare. He explains how it felt so real. Papa Smurf explains that dreams can’t hurt him, but Greedy's food can which Greedy says never hurt him. Papa Smurf then tells everyone to head back to bed and they do that as there is work to be done. Lazy hopes for sweet dreams and he dozes off.
He dreams he’s in the forest and sees a hammock. He thinks it’s a nice place for a nap. He does that when an evil laughter wakes him. The hammock turns into a snake, capturing him but he escapes. He runs into a covered bridge but is stopped by a sinister looking man and his horse. Lazy wakes up screaming for help once again. They once again come to his house.
The next morning, Papa Smurfs tells them they need to eat before working on a bridge. Brainy complains and mentions Lazy kept them up at night. Vanity and the other Smurfs agree. Papa Smurf decides to have a discussion that night. During it, Lazy mentions how scary it is. Papa Smurf understands and tells him he needs to face his fears. Despite being told to have a good night's sleep, Lazy refuses to sleep. He tries to stay awake with some company, but everybody is too tired.
The next morning, the Smurfs complain how Lazy has prevented them from going to sleep all week. Handy suggests they read from Brainy, who is offended. Smurfette says they all must help.
That night, they try to help Lazy sleep, but he refuses. He keeps refusing until he falls asleep in the same hammock that turns into the same snake. Lazy runs into the same bridge but is captured by the same man.
The next day, the Smurfs are working on the bridge when they notice Lazy isn’t there. They decide to let him sleep. Later that day, Greedy calls everyone for dinner but still no sign of Lazy. Smurfette decides to check but is shocked and gathers the others. She explains he still hasn’t woken up. They try a few ways to wake him up but all fail. Smurfette decides to take Lazy to Papa Smurf. Papa Smurf is as confused as they are. He tells them to head to bed while he investigates. Papa Smurf is curious on how Lazy isn’t waking up. Lazy, in the dream world is trapped in a cage in a castle owned by the evil man. Lazy begs to be released but the man refuses. He introduces himself as Morphio. Lazy continues to beg when he mentions the other Smurfs. Morphio is pleased with this news while Lazy begs him not to.
Meanwhile in the real world, Lazy shouts Morphio’s name. Papa Smurf feels like he’s heard it before and checks his books. Soon at Greedy’s house, he dreams he’s about to eat muffins, but they come to life, and he chases them into the clutches of Morphio. Soon Smurfette is next. In her dream, she is admiring flowers when they sprout the looks of Gargamel and she runs into Morphio. Then Brainy dreams he’s being chased by a book and ends up captured. Vanity dreams he sees a huge mirror but instead of his reflection he sees Morphio who captures him. He returns to his castle much to Lazy’s horror.
The next morning, Papa Smurf discovers Morphio is a demon who feeds off fear. He tries to warn the others after learning this but finds he’s too late. Morphio is revealed to have captured more of the Smurfs. Lazy realizes it’s all his fault.
Throughout the day, Papa Smurf is having no luck waking the Smurfs as Morphio is strong. Papa Smurf decides to enter the dream world with the help of the sandman. He enters the land of nod. He tries to wake the sandman but has no luck. He uses a trumpet which wakes him. The sandman refuses to help Papa and orders his rams to chase him out. Papa Smurf wonders how he can save his Smurfs. Meanwhile, Morphio traps the Smurfs in bubbles including Jokey being trapped by a monster and Brainy being bombarded with letters. Lazy begs him to stop as it’s his nightmare, but Morphio refuses as it’s now all the Smurfs' nightmare. Lazy wishes Papa Smurf was there to save them.
Papa Smurf is still being chased by the rams when he sees the gate and hitches a ride on one and he enters the dream world. He comments on the flowers but mentions how things in the dream world aren’t what they appear to be. He sees the bridge and gets a bad feeling. He sees Morphio's castle and hears Farmer trapped in a world where he’s a scarecrow. Papa Smurf decides to use Lazy to help him rescue the other Smurfs. Lazy once again mentions it’s all his fault and hears Papa Smurf. Lazy sees him and thinks he’s asleep as well, but Papa Smurf says he physically entered to save him. He opens the cage, and they try to escape but they are captured by Morphio, but not before being told he has to face his fear. Morphio imprisons them and Lazy realizes it’s up to him. He realizes it’s as well his dream so he’s in control. He and Morphio battle which Lazy wins and rescues the others. Morphio runs in defeat and fear. Papa Smurf congratulates Lazy and says there’s no more reason to be scared. Every Smurf can now wake up. Lazy is now ready to face his fear if it happens again.
