Amy first seeing Slappy being alive when she spies on him getting out of the closet to sneak in Sara's room again. Her narration of the door opening and then a dark shape coming out of it is very slow and bone-chilling, just like her description of how deeply disturbing his dragged walking and moving of his boneless body is, comparing it to the uncanny movements of a marionette.
When Slappy gets out of the closet to directly confront Amy about how she has awakened him and thus will be his slave for the rest of her life. When Amy tries to resist, Slappy threatens her that he will start causing even bigger disasters for which she will always be blamed, reminding her that her parents already believe that she is going insane, then he shouts that they will lock her up in a mental asylum the moment he decides to get worse if she doesn't obey him. Likewise the small fight that breaks out between Amy and Slappy gets disturbing, especially when Amy screams upon seeing the dummy slowly raising a closed first before punching her, at least in the first book Lindy came to Kris' assistance against Mr. Wood rather quickly, here before The Reveal that Sara is on Amy's side, the odds are strongly against this poor girl stuck with a demonic dummy and a family that is turning against her.
The episode contains examples of:
The shot of Slappy's moving shadow on the wall above Amy's sleeping parents as he makes his way to the guitar. Nope. Just NOPE.
The ending. Just when it looks like Slappy has won, having Amy and Sara at his mercy, a fourth party suddenly shows up and smashes Slappy's head on the fireplace. We assume it's Jed, but it turns out to be Dennis, Amy's previous dummy before Slappy showed up, and he's a living dummy too. He happily says "It's good to be back in the family again!" while giggling in a Goofy-esque voice. It's left a mystery as to who defeated Slappy in the book, but it's made clear here that it was Dennis, and it's ambiguous as to whether or not he's evil like Slappy, since the episode ends with him giggling, and everyone looking shocked and/or terrified.
