Sealab, it turns out, was built on top of an ancient Indian burial ground, and as a result is now sinking. Stormy suggests they leave a time capsule for future generations so they know people were here, but Sparks suggests that they rig the capsule to poison the finders with nerve gas. Shanks, believing that since it's the Indians' fault they're sinking, an Indian should fix it, tries to convince a Native American named John Bear to dance a dance that will reverse the sinking. John Bear, though, is racist toward anyone not Indian, and refuses. Shanks tries bribing him by telling him he could convert the mess hall into a casino.
The casino is quickly built, but John Bear still refuses to dance until he gets a better greeter than Sharko and a headliner for a lounge act. Debbie tries to get the job, citing her experience as a lounge singer when she worked her way through college, but John Bear rejects her and tells her to bring him another bourbon and coke.
Quinn has fallen back into his gambling addiction, playing craps. When Stormy asks if Quinn was going to fix the sinking Sealab, Quinn says he's too busy winning and Stormy could do it. Debbie's furious that Quinn's fallen Off the Wagon, and that he's using her loaded dice (which has four on all sides).
Dolphin Boy was the one hired to headline the lounge singing, and proves very popular. At the Trail of Beers bar, Stormy is telling two dancers how Quinn put him in charge of saving Sealab. The dancers decide to do body shots, and Stormy decides to supervise.
Hesh is down to one quarter after a tremor from Sealab sinking makes him lose most of his money on roulette. Shanks demands that John Bear start dancing while John Bear shoots arrows for laughs. Once again, Virjay has to assert that he is not that kind of Indian, and tries to warn about Sealab being in danger, but is killed by John Bear's arrows.
Hesh goes to the slot machines. What he says to a group of old ladies comes out wrong, and the ladies think he's hitting on them. His next words make it worse, and one of the ladies conclude that he's mentally disabled.
Debbie goes to Sparks to try to convince him to help her hijack Dolphin Boy's show. Sparks doesn't want to leave his cage full of money at first, but Debbie convinces him by tempting him with the one thing he loves more than a cage full of money. Well, that and two cages full of money.
Shanks is glad to see John Bear finally dancing, but it turns out to be a celebratory dance because John Bear got a pair of eights in blackjack and decides to double down on it.
Dolphin Boy begins his animal taming act, but Debbie shoots him in the head and begins to sing as whirring blades destroy Dolphin Boy and all the animals. Sparks joins her on stage, and they sing a song called "Joking Song", about how yes, they make stereotypical and offensive references all the time, but it's all in good humor. Just as the song ends, Sealab is nearly completely sunk and starts leaking.
Shanks tells John Bear that it's now or never, dance to get them out of this. John Bear admits that he's actually a white man posing as a Native American. When Shanks points out that this makes him a bigger racist than Shanks, John Bear reveals that he's really a Native American posing as a white man posing as a Native American. All to teach Shanks that racism is for the birds. Then he rips his real skin off and screams in pain.
The Stinger: An outtake from the Joking Song.
The Other Stinger: Millions of years later, aliens find the former site of Sealab and find a time capsule. But Sparks had gotten his way and it was rigged with nerve gas.
