The kids at South Park Elementary are being punished for Cartman's failings in the physical education department. What will Cartman do when they all gang up on him?
At an assembly, the student body of South Park Elementary is informed that they have scored the lowest in the entire country on the Presidential Fitness Test. This is due to Eric Cartman's poor health, which single-handedly ruined what would have been the school's otherwise acceptable average. As a result, the students will have physical education in place of recess for four weeks, with each grade alternating each day. When they rebuke him for this, he accuses them of being the 99% that is "ganging up" on him, the 1%. When Craig dismissively tells him to go home and cry to his stuffed animals as usual, Cartman does just that. As he commiserates with his five stuffed animals, he carries on a conversation with them in which he provides their voices (though the camera focuses on each toy during their speech, rather than Cartman, in order to frame these scenes through Cartman's fantasy). When the toys "tell" him that the Fitness Test is President Obama's fault, Cartman concludes that he is being blamed because it is not politically correct to blame a black president, even accusing the student-filled cafeteria of being a "99% rally" being held against him. This incites Butters and Jimmy to form a 99% club to protest their being punished for Eric's poor health. An angry group of fifth graders agrees, saying that it is time to make Cartman suffer.
When the head of the Colorado Division of the President's Council on Fitness, Sports and Nutrition refuses to drop Eric's test scores from the school's average, Butters and Jimmy stage a two-man protest outside his office that despite its size, attracts the attention of the police. A two square mile perimeter around them is created, with accompanying news media. The news networks mistakenly report that they are occupying the Red Robin two doors down from the Council office.
Meanwhile, Cartman discovers his beloved stuffed animals being mutilated and destroyed one by one, beginning with his long-beloved Clyde Frog. Clyde is found nailed to a tree with the word "VENGEANCE" written beneath him. Cartman regards his animals' destruction as their "deaths", and even holds a funeral service for Clyde Frog. When other boys ask the fifth graders if they're behind the mutilations, they do not give a straightforward answer. Instead, they state that Cartman has had a comeuppance coming his way for a long time, and that because the rest of Cartman's fourth grade classmates have failed to rein in his problematic behavior. The leader menacingly have something big planned to remedy the problem, in which they warn Stan and his friends not to interfere. When Peter Panda, another of Cartman's toys, is destroyed by a fire set in Cartman's bedroom one night, he seeks refuge with his three surviving stuffed animals at Token Black's house, because, according to Cartman, black people are not subject to criticism or harassment and he feels it is safe.
Meanwhile, the fifth graders stage an "83%" protest right next to Butters and Jimmy's 99% protest, proclaiming that as the 83%, they are tired of being punished for the fourth grade class. This begins an argument between the two groups that degenerates into a physical altercation that media characterize as "class warfare".
As Token and Cartman watch TV, they hear someone at the door. It turns out to be Kyle, who says he's there to help Cartman. Cartman doesn't believe him, but Stan and Kenny walk out from behind a bush and confirm they are there to help. Cartman hears something inside the house and runs in. He discovers Muscleman Marc and Rumpertumskin, two more of his toys, destroyed, with the remaining one, Polly Prissypants, sitting in an armchair with a revolver, claiming responsibility for all the toy "murders". As the camera now drops the fantasy by openly showing Cartman voicing Polly, "she explains" that she did this because his friends were right when they said that he needed to grow up. Unbeknownst to him, Cartman's stunned friends watch the bizarre scene unfold from a balcony, as do Cartman's mother and Token's parents from outside a window. Cartman is horrified that Polly murdered her friends, but Polly explains they were holding her and Cartman back, and that now, with the latter deaths occurring at Token's house, the blame will fall on him, while she and Cartman can grow up together. When Cartman points out that black people cannot be blamed for anything any more, Polly realizes her catastrophic error, and convinces Cartman to shoot her to death in order to escape blame himself, which Cartman tearfully does.
The protests eventually fall apart, as the 99% and 83% are replaced by various smaller percentages, according to a reporter, who then rushes away when he is informed that protestors are now "occupying" a Macaroni Grill.