Lisa’s new best friend creates a fantasy world so real it threatens to drive them apart.

Homer drops off Bart and Lisa at the Springfield Recreation Center, where Bart learns Shaolin Kung Fu from the Comic Book Guy. Lisa, however, has a more difficult time choosing an activity. She eventually settles for a painting class, where she strikes up a conversation with a girl her own age named Juliet Hobbes. Juliet shares Lisa’s passion for vocalist Josh Groban. Neither Lisa nor Juliet cares for the their painting instructor, so they run out of the room and make their way to the recreation center’s merry-go-round. Juliet tells Lisa that her father is a professor at Springfield University. Later Lisa shows up at the Kwik-E-Mart to pick out some candy for her play date with Juliet. She then travels to the fancy private school that Juliet attends. Lisa is impressed to learn that Juliet has been to Sumatra. Before long Lisa and Juliet pretend to be in Sumatra, where they encounter a Komodo dragon crossing a rope bridge. Lisa invites Juliet to join her family for dinner. That night Lisa and Juliet have a sleepover, during which the two girls dream up an imaginary kingdom: Equalia. Lisa records their ideas in a journal. Before they go to sleep, Lisa and Juliet decide to be best friends.

The next day at school, word spreads that Lisa has a best friend. After school the girls continue to work on their imaginary kingdom, dreaming up new characters and a plotline. Later the Simpsons have dinner at the Hobbes house, where Homer chats with Juliet’s father. Professor Hobbes fears his daughter is too obsessed with Josh Groban, so he plays some music from the soundtrack to The Pelican Brief. Juliet, who hates the score, erupts with anger. She runs into the backyard, where she tells Lisa she can see the sprites, fairies, and other characters from the land of Equalia. To Lisa’s surprise, she can see the imaginary creatures as well. Later Principal Skinner warns Homer and Marge that Lisa’s grades have been suffering. Marge thinks Lisa and Juliet are spending too much time together. When she discusses the situation with Lisa, and suggests that she and Juliet spend time apart, Lisa threatens to disobey her mother.

Juliet pays Lisa an unexpected visit at Springfield Elementary. Juliet suggests that they run away together. Lisa likes the idea, but fears it will interfere with her plans to attend a Model UN meeting that weekend (she’s supposed to assume the role of a delegate from Azerbaijan). Despite her concern, Lisa joins Juliet for a walk to a rundown seafood restaurant called Clam-elot Seafood. Although the building is closed for business, in Lisa and Juliet’s eyes it assumes the appearance of a fabulous castle. Marge learns from Milhouse that Lisa missed the Model UN meeting. Concerned, Marge and Homer make their way to the Springfield miniature golf course, where Marge expects to find Lisa and her friend hiding out at the golf course’s castle. The castle is empty. Bullies Dolph, Jimbo, and Kearney show up at Clam-elot Seafood, which they use as their hideout.

The bullies confine Lisa and Juliet in some lobster traps. After Dolph and Jimbo leave the restaurant to find some cream for their peaches, Kearney becomes entranced by the magical world Lisa and Juliet describe, especially when he finds out that Equalia is populated by dragons. When Dolph and Jimbo return with the cream, and attempt to burn Lisa and Juliet’s journal, a fight breaks out between the bullies. During the commotion Lisa and Juliet escape on their bikes. Lisa takes the opportunity to tell Juliet that it’s best if they no longer remain best friends.