The ponies receive an invitation to a party in a nearby mansion and are informed to bring the newborn twins along, as the party is in their honor. The older baby ponies, much to their irritation, have to stay behind. Once the others get to the palace, they're initially very impressed by its size and grandeur, but things soon start to seem amiss — a mysterious girl implores them for help, runs into another room and vanishes, the resident duchess is crude and ill-mannered, and the babies vanish from their room. Soon after, the guards arrive at the ponies' room and arrest them. As it transpires, the Duchess' spoiled daughter wanted special pets, and her mother decided that the newborns would be suitable; the party was just an excuse to bring them to the palace.
Meanwhile, the baby ponies decide to crash the party, forcing a reluctant Spike to tag along or be left alone, and sing a song about how much they dislike the newborns and all the terrible things they want to happen to them. The adults get thrown in the dungeons, where they meet Prince Phillip. He explains that he's the rightful ruler of the palace, but his scullery maid staged a coup and made herself duchess. His sister Suzette has been able to move about thanks to the palace's secret passages, but none connect to his cell and he's stuck where he is. Buttons is able to use her telekinesis to steal a sleeping guard's key ring, and the group is able to get out and vanish into a secret passage.
Meanwhile, the baby ponies reach the palace and are met by Suzette, who shows them how the Duchess' daughter has clapped the newborns in chains and is treating them like pets or toys. The babies are duly ashamed, as they'd earlier fantasized about this very thing, and decide to rescue them. They make a rather good showing of themselves and meet up with the prince and the adult ponies. However, the guards soon arrive and seem set to overwhelm them. However, Prince Phillip is able to use their boss' treatment of innocent newborns to shame the guards, who abandon her and rejoin his side. The duchess is rapidly demoted to her old menial work, Prince Phillip retakes the throne, and the ponies are reunited.
This episode contains examples of:
- Ambiguous Species: It's not made clear what species the Duchess, Prince Phillip and the others belong to. They're chiefly a stand-in for humans, but have pointed ears and aren't much taller than the ponies — even the adults don't stand much higher than Megan usually does.
- Be Careful What You Wish For: The baby ponies are very resentful of the newborn twins and sing about how much they'd like it if bad things happened to them, spending the most time about how great it would be if someone chained them up to keep as pets. When they get to the palace and discover that this is precisely what happened, they find that this thought isn't quite so funny anymore.
- Infant Sibling Jealousy: The baby ponies, who over the second season have started to grow up, are deeply resentful of the two pairs of newborn twins, whom they find annoying and troublesome and who demand constant attention from the older ponies.
- Jerkass Realization: The jealous foals wish all manner of unpleasant fates on the twins when said twins are the ones invited to a banquet. The older foals are horrified when it turns out to have been a trap and one of those fates they fantasized about (captivity) comes true.
- Literary Allusion Title: The episode's title is derived from The Prince and the Pauper, an 1882 novel by Mark Twain, although the two stories don't share much beyond the presence of a prince.
- Made a Slave: The Duchess intends to capture the baby ponies and keep them chained up as pets.
- Nice Job Fixing It, Villain: When the Duchess and Margette are sent back to the scullery, the Duchess angrily says to Margette "You just had to have a pet, didn't you?"
- Secret Path: The palace is riddled with secret passages, mostly of the kind where a wall folds back to reveal a hidden tunnel at the press of a specific brick, which Phillip, Suzette and the ponies use to sneak about without the guards or duchess' knowledge.
- Series Finale: Not counting the second TV special recycled into the last two episodes, this was the last episode of the show to air.
- The Usurper: The Duchess had Prince Phillip imprisoned so that she could take over, as she's actually just the palace cook.
- Would Hurt a Child: The Duchess has the newborn twins kidnapped and chained to use as pets. This proves to be her undoing, as Phillip is able to use this deed to shame her guards into turning on her.
