Martha is chasing an anthropomorphic ham in black-and-white, but then Skits jolts her awake, revealing it to be a dream. He wants to play ball with her, but she wants to keep napping. He tries to play with the Lorraines, but Helen's busy painting, Mariella's busy arranging flowers, Danny's busy watching sports, and he doesn't bother asking Jake, so Skits leaves the house.
Meanwhile, Milo and his father (first seen in "T.D.'s Magic") are moving house, and Milo is bored too. His father gives him a belated birthday present and asks how it feels being seven, but Milo glumly replies that it's just like six but more lonesome. He opens his present, a frisbee, and wants to play with it, but his father needs to help the movers.
Milo and Skits are still bored, but Milo pricks up when he throws his frisbee by himself and sees Skits catch it. Skits gives the frisbee back to Milo and then tries to leave, but Milo offers to play with him instead. Skits is keen, so he and Milo play fetch, while Milo's father (whose name is revealed to be Terrence Lee) talks on the phone. Milo, not realising Skits has a name, introduces himself and names Skits Mr. Scruffles.
When Skits is trying to get Milo's frisbee down from a tree, Helen finds him and Mariella drives him home. The frisbee falls down and Milo looks around. When he explains that he's looking for "Mr. Scruffles", Terrence, noting that Milo used to have a stuffed bear called that, thinks "Mr. Scruffles" is imaginary. On the car ride home, Skits tells Martha about Milo, but Martha (due to there existing a TV show about a Martian called that) thinks Milo is imaginary too. Martha concludes that Skits probably made up Milo due to loneliness and suggests being nice to him the next day, while Terrence phones someone up who says that it's normal for a kid to make up an imaginary friend if they've moved into a new city.
The guys Terrence is talking to speak on the radio, and one of them says that people should play along and pretend the person's "friend" is real. So Martha, having heard this advice, tells Skits the next day (who says he's going to Milo's house) that he doesn't need to go there as she and Helen have "a big surprise" for him. Helen reveals that they're going to Flea Island, and Skits asks if he can bring Milo. Playing along, Martha says that Milo is already in the car, but of course, he's not. Helen and the dogs get into the car, with Skits frustrated that they don't think Milo is real, but happy to go to Flea Island.
Meanwhile, Terrence is pretending to play with "Mr. Scruffles" until Milo reveals that Mr. Parkington (who lives between the Lees and the Lorraines) is watching. Terrence decides to take Milo to "look for Mr. Scruffles" in town, where they might meet other seven-year-olds, and Milo agrees.
The Lorraines have fun on Flea Island, while Milo goes shopping, mistakes another dog for Skits, draws Skits, and shows the drawing to an old lady. On the way home, Skits is disappointed that he didn't see Milo, which makes Martha snippy as she thinks he sees the Lorraines as less fun. Milo is also disappointed, but he's also happy that he got to have a walk around. He then sees Skits driving past in the Lorraines' car and points him out.
The Lees follow where Milo pointed and end up at the corner store, and they find no Lorraines but T.D. Terrence asks if he knows the neighbourhood well and he responds in the affirmative, introducing himself. Milo shows the drawing of Skits and says he's looking for the dog, and T.D. recognises it as "one of Helen's dogs" and gives the Lees directions to the Lorraine house. The Lees are thankful until T.D. advises them to ask for "the girl with the talking dog" if they get lost.
When the Lorraines get home, Skits wants to take them to Milo's house to prove he's real, which the family agrees to. Thus, when the Lorraines follow the directions, there is nobody at home, but luckily Truman is at home watering his plants next door. Milo asks if a girl named Helen lives there, and Truman affirms, adding that someone called Martha lives with her. Terrence asks how they can find Martha, but when Truman says that she might be digging, chewing on a stick, chasing squirrels, or rolling in the garbage, this disturbs Terrence. Truman asks if they want her to call them, but Terrence says no.
At the Lee house, Helen asks Skits if he's sure this is Milo's house, since the letterbox says, "LEE". She asks if Milo's last name is Lee, but Skits doesn't know. Martha notes the lack of furniture and wonders if the occupant is moving out.
The next day, Martha plays with Helen, Truman, and T.D., but they don't know where Skits is. The Lees are also playing in the same park, unseen by the other kids and Martha. Terrence throws the frisbee, and then Milo and Helen catch it both at once. Milo proves it's his because it has his name on it, and Helen is surprised to find that this boy's name is Milo Lee. She introduces herself and he asks if she's the same Helen who has a talking dog. Then, Martha shows up and tells Terrence that the frisbee he picked up is hers since it has her toothmarks.
Terrence thinks he must be sick and hallucinating, then Helen shows Milo to her guy friends. T.D. recognises Milo and says his name, surprising Martha. Then, Terrence asks Martha if she is Martha, and Skits shows up, who Milo calls Mr. Scruffles. Martha and Terrence are both confused, but T.D. says that Terrence will get used to the "confusing town".
This episode provides examples of
- Accidental Misnaming: Milo doesn't realise Skits has a name and calls him Mr. Scruffles.
- An Alien Named "Bob": Conversed when Martha says, "Milo, eh? Like the Martian on TV?".
- Anthropomorphic Food: At the beginning, Martha is seen chasing a ham with arms and legs.
- Ask a Stupid Question...: Discussed when Terrence thinks that T.D.'s response to asking if he's seen the dog in the drawing (giving directions but then saying that the owner has a talking dog) is him being mean to the new kid.
- Comically Missing the Point: When Milo says being seven years old is "lonesome", his father replies, "Lonesome?", surprised that his son would jump to that conclusion so soon after moving. Milo assumes his dad doesn't know what "lonesome" means.
- Continuity Nod: Skits is attracted to Milo's frisbee, referencing his love for flying things in "Martha and Skits".
- Delibetately Monochrome: Martha's dream at the beginning is in black-and-white.
- Dogs Hate Squirrels: Discussed when Truman says Martha may be chasing squirrels.
- Dramatic Irony:
- The viewers already know that both Skits and Milo are real, but Terrence and Martha respectively think they're imaginary.
- We learn Milo's last name is Lee long before Skits does.
- When Martha sees the Lees' unfurnished house, she thinks someone is moving out, when we know they're moving in.
- Filthy Fun: Discussed when Truman mentions that Martha might be rolling in the garbage.
- Formally-Named Pet: Discussed when Milo thinks Skits has no name and calls him "Mr. Scruffles".
- Mistaken Identity: Milo mistakes another dog for Skits due to him having the same face.
- Name and Name: An interesting case, because the title has a character's name, and then the same character's nickname.
- Not-So-Imaginary Friend:
- When Milo tells Terrence about "Mr. Scruffles" (actually Skits), Terrence thinks Mr. Scruffles is imaginary.
- When Skits tells Martha about Milo, she thinks he is imaginary due to sharing a name with a Martian on TV.
- Offscreen Crash: A Running Gag is that the movers keep making things crash offscreen, making Terrence groan.
- Running Gag: The movers keep causing Offscreen Crashes, causing Terrence to groan.
- Shaking the Rump: Skits wiggles his butt when chasing the frisbee.
- Tropey, Come Home: Skits wanders off out of boredom and the Lorraines search before finding him near the Lee house.
- You Can Talk?: Terrence is agog and wonders if he's sick and hallucinating when he first hears Martha speak.
