Rogers has brought a three-cornered hat from the 18th century. He and McFeely travel through the neighborhood, observing various hats certain people wear. Upon gaining interest in them, King Friday orders everyone to wear three-cornered hats

Rogers inevitably fools Marilyn Barnett by donning the Bob Dog costume. Mr. McFeely shows a videotape on how blue jeans are made. Lady Elaine Fairchilde provides the only resistance to King Friday's insistence that everyone and everything in the Neighborhood of Make-Believe should wear the three-cornered hat from the 18th century.

Rogers sees Alan Morrison play the organ at a nearby church. Lady Elaine Fairchilde squirts water at anyone who mentions "three-cornered hat" to her. King Friday hardens his position with a rule.

Chef Brockett explains how he uses canes to walk following his operation. Rogers returns to see Alan Morrison play alongside a flutist and a clarinetist. Betty Okonak Templeton visits the Neighborhood of Make-Believe with a way to break the impasse between King Friday and Lady Elaine.

Using a portable sewing machine, Rogers shows the stark contrast between clothing of today and clothes of the 1700s. Then he visits a building in Colonial Williamsburg. In the Neighborhood of Make-Believe, Lady Elaine and Betty Okonak Templeton exploit the loophole in King Friday's three-cornered rule. Finally, everyone else takes off the hats.

A map of the world painted by a friend of Rogers is shown on the back of an old floor covering. Rogers demonstrates traveling from place to place. Dan Kamin demonstrates his mime act. He acts as a mime character in the Neighborhood of Make-Believe.

The Neighborhood of Make-Believe finds a newcomer. Stephen Owl, who is X's cousin, is in search of a tunnel believed to be in the neighborhood. Rogers shows the inside and outside of an ambulance.

Rogers gets a feel for shooting a basketball from a chair. This segues eventually to his visit with a wheelchair basketball team called the Steelwheelers. More residents in the Neighborhood of Make-Believe join in Stephen's search for a hidden tunnel. One clue comes from a scrap of paper.

Rogers uses a long piece of plumbing pipe to simulate a tunnel in which blocks and a car could travel through. Mr. McFeely shows a video of passing through a car wash. In the Neighborhood of Make-Believe, King Friday hears of the search for the lost tunnel. Lady Aberlin finds all the pieces to the old parable about it, and it is very close to X's tree.

Chuck Aber surprises Rogers with what he calls his "piece of equipment." It's heavy machinery used for digging dirt. Mr. McFeely shows a videotape on how tortilla chips are made from blue corn. Friends in the Neighborhood of Make-Believe discover the secret tunnel and learn where it goes.