Binky is feeling ill, so Jorgen comes to cheer him up by telling him a magical story about Timmy and his fairy godparents, Cosmo and Wanda, but this is bad news for the trio as what ever Jorgen reads from the story will really happen to them!
The episode starts in Binky's house, where Binky is sick. Jorgen Von Strangle pays Binky a visit to look after him. He drops a 500-pound pot of soup on Binky's body and reads him a bed-time story. He titles it, "Timmy the Barbarian". Suddenly, everything Jorgen tells to Binky will really happen to Timmy, Cosmo, and Wanda. Jorgen starts the story by saying that Timmy is missing something. After watching a barbarian movie, Jorgen made Timmy wish that he was "Timmy the Barbarian". He is allied with Nagules, Wanda's character, his trusty sidekick, and Cosmodeus, Cosmo's character, the human pack mule, who has to carry all of Timmy's stuff.
Timmy the Barbarian, Cosmodeus, and Nagules start their journey to retrieve Timmy's missing object, the Chalice of Mome. While telling the story, Jorgen added to Cosmo's character, "the mule-faced human pack mule" and made him trip on a bug twice. Timmy, Cosmoleus, and Nagules made it to "The Bride Guarded By Francis the Thunder Troll". Seeing the tiny size of the bridge, Timmy believes that the Thunder Troll is small, but is soon revealed that Francis is a giant troll. Timmy jumps in Francis' belly button and taunts him, making Francis hit himself on the stomach. Timmy crawls into Francis' left ear, making Francis slap himself. Timmy crawls into Francis' nose hole, making Francis punch himself in the face, knocking himself out. As Timmy prepares to retrieve the chalice, Jorgen reveals that Francis didn't have the chalice.
Jorgen then made Timmy, Cosmoleus, and Nagules continue their journey to find Vicky, The Evil Harpy on "Mount Fluffy Bunny". Jorgen then chooses, "Mount Disco" until he made his choice, "Mount Pain". While climbing to the top of the mountain, Jorgen made Cosmoleus trip on another bug, causing him to fall down the mountain. The trio reach the top and found a nest with three eggs. Vicky the Harpy pops up and scratches Timmy. Timmy pounces Vicky and prepares to throw her off the nest until Jorgen made Vicky going to destroy Timmy with her claws. Before he does that, Binky tells Jorgen to come up with a happy ending. While waiting, Timmy and Vicky play a card game. Back to the story, Jorgen makes Vicky drop Timmy on "The Forbidden Valley of the Really Pointy Rocks... of Pain" (Vicky notes "Sounds good to me!" before doing dropping Timmy). Before Vicky does, Nagules lassos her claw, gives Cosmo the whip, and pushes him off the mountain, causing him and Vicky to fall down and drop to the Pointy Rocks, hurting Vicky and deflating Cosmo's butt. Timmy prepares to retrieve the chalice, but Jorgen reveals Vicky didn't have the chalice either, much to their dismay.
Jorgen skips the parts where the trio land on an island filled with mermaids that all look like Trixie Tang, and their walk throught the candy forest, much to Timmy's dismay, to get to their destination, "The Volcano Lair of Crocker... of Pain" (originally it was just the Lair of Crocker, but Jorgen changed the name so that he would like it better). Jorgen reveals that Crocker is the one who has the chalice, much to Timmy's joy. In the Volcano Lair, Crocker, the Evil Wizard, makes Cosmo trip on a bug, which amuses Jorgen, and turns Nagules's whip into a snake, but Nagules nags at it. Crocker turns two giant snake sculptures to life, but Timmy breaks them to pieces with his knuckles. Crocker then faces Timmy with his worst enemy, Learning, frightening Timmy. Crocker asks Timmy four questions, and Timmy gets them all wrong, and everytime he gets wrong, chains lock his arms and legs. Crocker plans to devour Timmy in a dragon form, but before he does, Timmy tells Nagules to nag. Nagules puts on "Nag Balm" and begins to nag at Crocker. Timmy escapes the chains and the walls started to collapse. A big rock falls on Crocker and Timmy retrieves the chalice.
Back at the Turner Household, Timmy gave Mrs. Turner the chalice for Mother's Day. Mrs. Turner asks why does it say "mome" and Timmy answers that the spelling of her name. Even though Timmy had the spelling wrong, Cosmo and Wanda think its cute. Jorgen finishes the story and finds Binky sleeping. But Binky also kept farting in addition to the snoring, and Jorgen ends the episode saying, "Ooh, it's not just the flu!"