At Fluttershy's cottage, Fluttershy and Discord are having a good time with stories (and I question what's so funny about any of the stories Discord has told thus far). Fluttershy can't wait for Discord to meet her new friend Tree Hugger but Discord doesn't take it seriously (and how could anyone since it doesn't exactly scream best name ever). She'd meet TH during her trip to see the Breezies and figures they'll all have fun at the Grand Galloping Gala this year. Discord becomes excited and already has accepted the invite.
However, the invite is for Tree Hugger as she'd figured Discord got an invite too but Discord is not the least bit happy about it and eventually leaves without enjoying any of the remaining treats. Inside the castle, Spike is snoozing and is interrupted by Discord wanting to see Twilight and promptly tells him where to find her before remaining uncertain of what would come next. Inside Rarity's boutique, Rarity, Rainbow Dash and Applejack are helping the Cutie Mark Crusaders get ready for their first Grand Galloping Gala and the trio are very excited.
Applejack tries to keep them calm while she and Rainbow Dash play a card game but seeing Apple Bloom in her gala outfit leaves her touched that her own daughter is grown up. However, Discord cuts their excitement short as he asks about the trio having tickets and gets a quick answer of disgust and a note that the CMCs are the other trio's dates. Annoyed at the CMC echoing, Discord leaves before Rainbow Dash wins the game.
Pinkie Pie has just finished helping a customer at Sugar Cube Corner but has no trouble realizing that Discord is there and is willing to help with his over-generous order. By the time she gets the order ready to go and reveals that she's taking Maud to the Gala, Discord has spotted Tree Hugger and decides not to order the cakes at all. Outside, Discord interrupts Fluttershy's conversation with Tree Hugger and is introduced to her but only gives jealousy in return for a positive compliment from Tree Hugger.

At his house (which we've never known about until now and it could've been assumed he lived with Fluttershy), Discord makes his jealousy more obvious until a yelling interrupts him. It's the mailpony, whom is struggling to get around and has a letter for Discord but wasn't able to find any sort of address. The envelope contains Discord's ticket to the Gala and he doesn't bother to show the mailpony the way out and decides to go to the Gala anyway but since he feels that Fluttershy will consider him her only friend, he decides to bring someone else.

At the Gala, Twilight is happy to take over keeping things organized for the event but Discord's arrival with a literally reformed version of the Smooze draws their attention and Twilight pushes Discord aside to learn why the Smooze is there and to warn Discord to keep his friend under control. After giving the Smooze a few snacks to increase its size, Discord finds Fluttershy having a good time with Tree Hugger but finds it difficult to get Fluttershy's attention and gets reacquainted with Tree Hugger, even though they've met before.

Regardless, Tree Hugger is not deterred by the Smooze and Fluttershy is intrigued that the Smooze hasn't been brought up before given how close Discord is with it but the Smooze draws Discord away as it finds its next snack. Discord puts the Smooze aside to jokingly laugh along with Fluttershy as if to understand what was being discussed.  He then tries to bring up a supposed story of their latest incident but it doesn't get told with the same humor.

Things are not going well as they hear a scream from the other side of the locked door. Once opened, we find Rarity covered in slime and missing her jewels as the Smooze has found other snacks from additional ponies. Twilight reminds Discord of their agreement and eventually Discord obeys but makes it worse for Rarity by stripping her of her entire outfit. Discord has had enough and shoves the Smooze into a closet filled with jewelry, assuring that he'll come back once the Gala is over.

As Twilight tries to get things going again, Discord tries a comedy show with obscure references that only Celestia is remotely chuckling at. Rainbow Dash can't quite tell if they're jokes but jokes are Maud's favorite and even Maud comes up with a better act. While the crowd enjoys what little show there is, one pony is nervously watching as the door is forced open with the mound of Smooze pouring out. Worse still, it floods the area and not only are ponies stuck in it, Twilight's magic doesn't work against it and Celestia is unable to help since the Smooze covered the tip of her horn.

In spite of everything going on, Discord doesn't see the same fear. Tree Hugger has a theory that the Smooze is just acting this way because it's agitated but Discord doesn't buy it until she starts her meditation. It's enough to get the Smooze to come together and free up everyone trapped within it. Discord has had enough hippie talk and is willing to completely send Tree Hugger far away. He grabs her and is going to send her to another dimension painlessly but Fluttershy is not amused.

Twilight and her friends try to intervene but are swept up in the Smooze's game of fetch. How could Discord do this when their friendship with Tree Hugger started so well? Discord feels that he's been deserted for Tree Hugger but Fluttershy never had such an idea and gets Discord to realize how much he overreacted to the situation. With that, he frees up Tree Hugger and puts her safely on the ground before Fluttershy hugs her. As a bonus, the stolen treasure is returned and the Mane Six are freed before Discord gives an apology to Tree Hugger.

As the Gala continues, Discord owns up to the Smooze as he never thought about its feelings either (though it didn't seem to care either way). Maud and Discord are beginning to like having multiple friends and Pinkie Pie drags Smooze away to dance with her. Twilight apologizes to Celestia for how wrong the event has been but Celestia loves it as otherwise it'd be rather boring (though one needs to draw the line because this was clearly more than enough to spice up the event). With the night still young, there's still plenty of time to have fun.