Yellow Guy is in bed, crying because he misses his friends, who have disappeared over the course of the previous two episodes. As he tries to go to sleep, a lamp who sings about dreams appears. Despite Yellow Guy's protests, the Lamp drags him along for an animated sequence that ends with him having a dream about drowning in oil. Yellow Guy then wakes to see the Lamp transform his mattress into oil. Yellow Guy struggles to get out, but eventually his head goes under...
Suddenly, Red Guy wakes up at his desk in an cubicle farm with multiple other Red People identical to him, milling about and doing office jobs. He asks if it wouldn't be "funny" if an office file came alive, and tries singing a song about it, but his colleagues are not impressed. But Red Guy keeps staring at the file, as though something has occurred to him. Later, Red Guy sits at a bar, whose patrons also resembles and sounds identical to him. Red Guy then steps onto the bar's scene, completely nude, shocking away the bar's piano player. He proceeds to perform the Creativity song from the first episode, but is booed by the crowd. Red Guy then notices Roy sitting still in the crowd, looking intently at him.
Red Guy looks at the microphone and boombox was using for his performance, and find that they have been turned into teacher-puppets and he has been transported to a darkened room. Red Guy follows the sound of the dream song to a machine with monitors showing Yellow Guy. Red Guy presses buttons that transform the lamp into the other five puppets from the previous episodes, besides the sketchbook, as well as several other puppets that seem to cover topics that were never mentioned, such as the universe, sports, how to buy a canoe, as well as smaller everyday life things such as traffic lights, music and even an office file (and at one point transforming the puppet into Duck Guy). Roy appears behind Red Guy and taps on the shoulder with a massively elongated arm. Seeing Yellow Guy becoming gaunt from his ordeal, Red Guy disconnects the machine's power supply, after repeating a line from episode 3: "I wonder what will happen."
The scene cuts to a reshoot of episode 1 with the protagonists recoloured to their favourite colour that they mentioned from the first episode. The calendar turns from 19 to 20 June. A sketchbook similar to the original starts singing the same song from the first installment but is cut off as the episode ends. The episode premiered on 19 June 2016.
Tropes:
- Ambiguous Ending: It is heavily up to interpretation. Is it a Downer Ending that has the puppets forever trapped in the Lotus-Eater Machine? Or is it a Surprisingly Happy Ending where the puppets seemingly escape for good and encounter Sketchbook, who was alarmingly absent from the machine. Implying that they are the Token Good Teammate. It doesn't help that there is evidence supporting both theories. And that the the tv show also supports both of them.
- Back for the Finale: Every teacher from the past five episodes return.
- Brick Joke: While trying to socialize with his fellow red things, Red Guy mentions the possibility of his file coming to life and singing about being a file and that you put things on it. Later when he messes with the machine controlling and creating the teachers, one of the new teachers is a file that says exactly what he said as the sole lyric we hear of their song.
- Continuity Nod: This episode is filled with references to past episodes.
- Comical Overreacting: Inverted. Since Red Guy's world is populated with people identical to him, their baseline emotion are somewhere between blasé and apathetic, and thus they comically underreact to everything. Red Guy stepping naked onto the bar's scene clearly shocks and offends the bar's piano player, but his spoken response as he walks away is a laconic "That's rude... No clothes..." And while Red Guy's performance is booed and heckled by the crowd, but they clearly aren't really putting any real effort into their boos, and their heckling consists of responses like "I don't like it," and "It's not very good at all."
- Creepy Long Arms: Out of the shadows, Roy reaches out a heavily elongated arm to put a hand on Red Guy's shoulder.
- Dark Reprise: Shrignold's verse in the final song is shown to sound more sinister than his previous song. It makes sense now that the audience knows his true intentions as the leader of a hypocritical cult.
- Demoted to Extra: Duck Guy only makes two brief appearances.
- Dream Episode: Aptly titled "Dreams", this episode has a Double-Meaning Title: Not only does it focus on Yellow Guy being tormented by an annoying lamp singing about dreams and nightmares regardless of his pleas, it also involves dreams as in goals, with the episode also focusing on Red Guy working in the boring real world and wanting to inject some creativity into his life.
- Extra-Long Episode: Most episodes go around 3-6 minutes. This one is eight minutes.
- Gainax Ending: The final moments of the episode have Red Guy discovering that almost all of the teachers from the previous episodes were summoned to their world via a console. Not only that, it's also implied that Yellow Guy's father is the one behind it. Red Guy unplugs the console from the wall... and the puppets appear back in the kitchen, colored differently. And then the sketchbook pops up again.
- Grand Finale: The final episode... of the Youtube series.
- Later-Installment Weirdness: It quickly deviates from being a music video like the first five to focus on Red Guy's struggles in the Red Guy world.
