After Timmy brings an extinct dinosaur to school, his crazy teacher suspects that he has Fairy GodParents, so he tells Timmy he wants to have a conference with his "parents." Since he has aspirations of "a new world order," he thinks that if he catches fairies, he can harness their power and rule the Earth. Timmy knows he can't explain to his real parents how he managed to come across an extinct dinosaur, so Cosmo and Wanda pose as his parents.

Cosmo and Wanda shrink Timmy so he can complete his assignment on the microscopic universe but problems ensue when Cosmo and Wanda, who have also shrunk themselves, get eaten by Vicky. Timmy must now go inside Vicky to save his godparents but stirs up a lot of trouble in the process. To make matters worse, Vicky plans on tearing apart the house and blaming it all on Timmy to his parents.

Timmy switches lives with Vicky's dog, but swiftly discovers that the dog actually has it just as badly as he does.

When Timmy feels sorry for the town's caged, prize goat, Chompy, and wishes he could be free, the goat disappears and Vicky gets blamed for goat-napping.