While playing in the woods, the boys befriend a wild dog, bring it home and name it Chimney. When the boys find themselves trapped in a well, the new pup is their only hope for escape.
The episode starts with the camera zooming from earth as it zooms to Clarence, Jeff and Sumo playing fetch-and-catch with a stone in the treehouse. As they played, Sumo decided to pounce on Jeff to capture the stone. However instead of Jeff, Sumo pounced on a dog resting in the woods. Clarence and Sumo first befriended the dog, having Jeff paranoid about the possible diseases catched in a kennel, but immediately Jeff was able to befriend the dog. Jeff first decided on placing posters about the lost dog they found all over Aberdale, having Sumo to write a poster that displays the words "Ghost Dog Beware". However the poster Sumo made flew from the wind, where it landed on Joshua's backyard and having to draw interest on it.
The three friends placed the lost dog secretly in Clarence's backyard, where they stood in the homeline to wait for someone to call about the ownership of the lost dog. However, Clarence decided to own it and "share it" among them three. They first decided to name the lost dog, considering to name it Frederick, Juice Machine or "Way-better-than-Jeff". Instead, Clarence officiated on naming the lost dog "Chimney" (reasoning out that he just felt that the name Chimney suits it).
In the weekends, Clarence, Jeff and Sumo all shared time in playing with Chimney. Clarence and Sumo played with Chimmey while Jeff took the time in taking the dog in serious hygiene. The three found favor and likeness in spending their time with their new "child" Chimney. However, Jeff is still anxious about the fact that Chimney is still a stray kennel. Clarence advised Jeff into stating "When life throws you a frisbee, you-" in which was cut when Sumo grabbed the frisbee from Clarence's hands and threw it. Sumo told Jeff to catch it, where both Jeff and Chimney ran for the flying frisbee. As both of them ran after the frisbee, Jeff was unaware he was running to an abandoned well, where he fell stuck in it.
Clarence and Sumo ran to Jeff's rescue, but instead fell inside as Jeff did. All three were stuck in the well. Clarence then remembered that they had the coolest, most "awesome-est" dog in the whole town. The three called out for Chimney to ask for help, who replied in throwing sticks and twigs at them. As Clarence and Jeff joked about sticks and the "when life gives you" phrases, Sumo kicked on to the two by handing over their shoelaces so as Sumo can create a ladder. Clarence handed to Sumo some numerous laces he kept in his pocket for emergencies. As time passed, the three were able to climb their way out of the abandoned well.
The three went home to Clarence's where they ate pizza together. As Clarence shares his idea of making a ladder up to the moon, he remembered someone missing from them: Chimney.
Chimney was shown to have rode a train with Joshua by his side. Joshua shared his love to the "ghost dog" and Chimney to Joshua. The episode ended with Joshua falling off the train, shouting out, "Ghost Dog!".