It's Halloween, and Billy, Mandy and Grim go trick-or-treating, while Irwin is left behind because he needs a scarier costume. After pulling a trick on an old lady, and getting some candies, Grim tells the story of why people pull pranks, which he was partially responsible for. He tells about Jack, a prankster of the old Endsville who just didn't know when to stop. One day, the citizens decided to punish him for his constant pranks, and they pulled a prank on the queen, but signed it "From: Jack"; in consequence, the angry queen sent a knight to kill Jack. However, when Grim went for Jack's soul, Jack stole his scythe. In return for his scythe, Grim promised Jack eternal life, but after closing the deal, Grim cuts Jack's head off. Thus, Jack decided to use a pumpkin for head, becoming Jack O'Lantern, and every Halloween he goes out to pull pranks on the citizens of Endsville.
After hearing the story, Billy splits from the group and finds Jack's house downtown. Then, Jack realizes Billy is carrying the actual Reaper's scythe, so he takes it from him and uses it to open the gates of the Underworld and bring forth ghosts, which cause havoc in the city. Jack then plans to get revenge on Grim by cutting his head off which, being cut with the Reaper's scythe, will be cut permanently. To stop Jack from carrying on with his vengeance, Mandy sets up a series of pranks for him. However, the pranks affect Irwin instead, causing major laughter from Jack and his ghouls, which explode and return to the Underworld. In the end, Grim recovers his scythe and sends Jack to the Underworld too.