Bugs Bunny and Elmer Fudd are engaged in their usual comical chase, a classic scenario that fans of these characters will recognize. The cartoon kicks off with Bugs constantly outsmarting Elmer, who is determined to catch him. In their typical antics, Bugs tricks Elmer into running through a hollow log and then off a cliff not just once, but three times, which leads to Elmer becoming increasingly frustrated. Feeling that the writers have unfairly deprived him of catching Bugs, Elmer dramatically tears up his Warner Bros. cartoon contract and decides to abandon the chase altogether to pursue a quiet life of fishing, leaving Bugs surprised and a bit saddened by the turn of events.
While fishing peacefully, Elmer falls asleep, and Bugs notices him snoring. Bugs comments on what he observes—a seemingly heavenly dream that Elmer is experiencing, involving the classic imagery of a log and a saw, symbolizing snoring. Curious and mischievous, Bugs decides to join Elmer in his dream world by taking a sleeping pill, which transports him into Elmer's subconscious. Inside this dreamland, Bugs takes on the role of a playful troublemaker, creating surreal and humorous situations to torment Elmer further.
In this nightmare universe, Bugs fabricates bizarre scenarios, such as Elmer appearing nearly nude, wearing only his derby hat and a laurel wreath covering his modesty. He then parodies a traditional military march, "The Campbells Are Coming," and overlays visual parodies reminiscent of the Pink Elephants on Parade sequence from Disney's Dumbo (1941). Here, Bugs cleverly manipulates the scene to have "zillion and trillions of rabbits" dancing around Elmer, singing merrily, "The rabbits are coming. Hooray! Hooray!" When Elmer asks where all these rabbits come from, Bugs nonchalantly replies, "From me, Doc," revealing that he is multiplying them from an adding machine—a humorous nod to chaos and surrealism.
Bugs then seeks another way to unsettle Elmer, consulting a fictional book called A Thousand and One Arabian Nightmares. Bugs exclaims, "Oh, no! It's too gruesome!" but quickly counters with an enthusiastic vow, "But I'll do it!" Elmer, realizing Bugs' intentions, pleads for mercy, begging, "No, no! No, not that! Not that, please!" as Bugs ties him to a set of railroad tracks. The scene is heightened with Bugs dressed as an Indian chief, leading a conga line of baby rabbits, all crossing over Elmer's head as a train, called "the Super Chief," roars past.
Elmer chases Bugs through a bizarre and psychedelic landscape, with Bugs playfully teasing him by asking, "What's the matter, Doc, ya cold? Here, I'll fix dat." Just before Elmer reacts, Bugs dresses him in drag—a comical transformation that turns the hunter into a glamorous woman resembling Rita Hayworth, complete with a dress, wig, and lipstick. Bugs inspects his handiwork and then lifts the backdrop to reveal a group of literal wolves dressed in Zoot suits, lounging under the Hollywood and Vine sign, whistling and catcalling at the transformed Elmer.
The chaos culminates as Bugs and Elmer fall off a cliff. Bugs, ever the trickster, drinks some "Hare Tonic" from the Stops Falling Hare cartoon, causing him to screech to a halt mid-air even as Elmer continues his free fall and crash-lands back into reality—waking him up with a start and a shout: "Ooh, what a horrible nightmare!"
Realizing it was only a dream, Elmer hurriedly pieces his Warner contract back together, reinstating his resolve to chase Bugs once again. The cartoon resumes with the classic log chase, but Bugs faces the camera in a close-up, flashing his signature grin and finishing with the humorous catchphrase, "Ah love dat man!", borrowed from the radio character Beulah of Fibber McGee and Molly.
This cartoon is a perfect example of the zany, imaginative, and irreverent humor characteristic of the Looney Tunes series, blending slapstick comedy, parody, and surreal visual gags to entertain audiences while staying true to the classic rivalry between Bugs Bunny and Elmer Fudd.