During an event in downtown Springfield, Professor Frink demonstrates a new invention that he soon loses control of, resulting in the destruction of the Springfield Retirement Castle. This results in Grampa moving in with the Simpson family. Meanwhile, Homer discovers an app game called "Villageville" on his MyPad, which involves constructing a village. His immediate addiction to it causes him to ignore Santa's Little Helper and lead to the dog's sudden disappearance. After minutes of searching, they eventually find Santa's Little Helper hidden in a pantry shelf below the sink. Lisa and Bart realize Homer has not paid any attention to the dog all the time. When Homer states that he does not get along with Santa's Little Helper because he is not a "dog person", Grampa mentions about another dog named Bongo, which upsets Homer. It is revealed that Bongo was Homer's childhood dog and best friend (along with Harry Nilsson singing Me and My Arrow from the cartoon The Point, which the animation also imitates, with cross-hatch shading and a more angular style).
Grampa soon reveals that during a kid's fundraiser Mr. Burns was hosting, Burns insulted Homer and Bongo attacked him in retaliation. Hugely upset, Burns demands that Grandpa turn Bongo over him so he can have the dog killed. To save Bongo's life, Grandpa sent him to a farm upstate run by a woman named Ms. Viola, but Homer was devastated, leaving Grandpa to suffer both his son's anger and Burns' making him take on a terrible job and awful wardrobe as punishment for not sacrificing Bingo. Back in the present, Homer has still resented Grampa to this day, realizing he will never see Bongo or that Bongo will never remember his old friend. Grampa then shows Homer a picture of an older Bongo resting on an old sweatshirt Homer gave to Bongo when the dog was left to Ms. Viola, proving that Bongo still remembers him. Homer tries to deny the truth but eventually bursts into tears when he realizes that Grandpa did something noble and suffered badly for it, and he immediate makes amends with his father and spends the following night sleeping on the couch with him and Santa's Little Helper, dreaming about himself walking with Santa's Little Helper alongside a younger Homer with Bongo, Burns with his dogs, and Krusty with a gorilla that was the predecessor of Mr. Teeny.
At the end of the episode, Mr. Burns has a sad (for him) conversation with Smithers where they concede that Mitt Romney lost the 2012 Presidential election, and then explains the fiscal cliff in his own words.