The Y2K scare is the source of the episode's plot. A costumed man warns Peter Griffin about the dangers of Y2K on December 31, 1999. Peter locks his family up in a bomb shelter that evening. A nuclear holocaust occurs soon after the stroke of midnight, destroying much of Quahog and mutating or injuring many of the surviving citizens. The Griffins are free from mutations. When food runs out, the family travels to Natick, Massachusetts in order to find food from a Twinkie factory, beleving that they survived the explosion. On the way, Stewie is exposed to nuclear waste and later mutates into an octopus-like creature. Upon their arrival at Natick, they establish a town, dubbed New Quahog, which Peter mismanages into chaos. Octopus Stewie then begins to lay eggs. Peter is eventually kicked out of the town he founded, and his family follows him. Meanwhile, Stewie’s spawn hatch, and begin to kill the New Quahog citizens. The Griffins head off to a Carvel factory in Framingham, Massachusetts. In the end, it's revealed that this entire episode was all just a dream had by Pam Ewing from Dallas. The rest of the episode plays out like a Dallas episode with Pam telling Bobby about her scary dream and Bobby having no idea what she's talking about because he's never heard of Family Guy before.
A cutaway gag shows an event called Y-2Gay, where a gay guy sits atop a building during a testicular ball drop, so that he can get teabagged by a giant pair of balls at the turn of the new millennium.
Dan Cortese celebrates New Year's with a bunch of people and then explodes to death. An announcer shows up to say that Dan Cortese was the only thing effected by Y-2K.