Oh my gawd. The gothiest toon ever.
A giant moving tower on wheels and (computer generated) legs shoots magical cannonballs that turn everyone in Nowhere green and sad. It is the work of the green-skinned Dr. Zalost, who wants to make everyone in Nowhere miserable like he is. He demands 33 1/3 billion dollars from the mayor. His assistant is a hunchback-ish rat with a scar called Rat. Zalost gets the money, but he is still not satisfied.
Meanwhile, Muriel is making happy plums. Eustace is mad the paper isn't delivered, so he tries to get it, and after a failed attempt, he meets up with Zalost's tower. It follows Eustace and fires cannonballs. Eustace isn't affected because he doesn't have much feeling. But Muriel is hit, so Courage needs to find a way to make her normal.
Courage hides in a pizza box that Eustace delivers to Rat. Courage finds piles and piles of cannonballs and he accidentally releases some, and one hits Rat. Rat turns into a giant demon rat. Courage fires happy plums because Muriel said they could make anything happy. Rat eats one and is turned into a baby (in a diaper).
Courage climbs a long case of stairs, but is captured by Zalost. He says if Courage can win a game of Hangman, he will let him go. If he loses, he will fire the cannonball at him. Courage (tied up) guesses the answer at the last moment. The word is "Boom." Zalost is still mad and recaptures Courage, and prepares to throw him into the cannonball vat.
Courage throws happy plums into the vat and the effect is reversed, and the tower explodes and throws pink "happy" cannonballs that make everyone normal. Courage cures Muriel, but Zalost is still angry. He throws a cannonball that turns Eustace to stone. Zalost eats some happy plums and is happy, and his green skin fades. He and [baby] Rat are back, and everyone lives happily ever after.