In order to demonstrate how to haunt a house, the narrator (voiced by Corey Burton) arranges for Goofy to be in an accident that causes his spirit to roam around as a ghost. Although Goofy worries that this means he's a goner, the narrator assures him that it's only temporary, just long enough to help with his demonstration. The first step is to "choose a house to haunt", so the narrator suggests that Goofy check the classified ads in the paper to find one. Doing as tasked, Goofy settles on a house on a hill with creaking hardwood floors, a fog-enshrouded breakfast nook and an informal dying room. Step two is "selecting a hauntee", and the narrator gives Goofy the choice of selecting Mickey Mouse, Clarabelle Cow, or Donald Duck to be the one he will haunt. After hearing him say that nothing scares him, Goofy selects Donald. For the rest of the demonstration, Goofy tries to creep Donald out as much as possible, but each time he fails in some form. Eventually, tired of being a ghost, Goofy has Donald look at him face-to-face, and the mere sight of him causes Donald to freak out and run out of the house, which gets him involved in an accident himself. Now in ghost form, Donald seeks revenge on Goofy, and the two ghosts end up chasing each other to the edge of a cliff, from which they both fall.
In one scene, Goofy is seen dragging chains around in his ghost form, a la Jacob Marley. This is a reference to when he did the same thing in Mickey's Christmas Carol, where he also played a ghost.