Dorothy, who happens to be Katy's friend, wants to become a dancer once again; however, she feels that she cannot because she is old. Katy and her friends find out that the theater is about to be taken down, so Parappa and his friends fix everything up for Dorothy to have one last dance on stage.
One day, PJ, Parappa and Matt go to the theater in Parappa Town. Matt states that the theater is scheduled to be destroyed soon. Parappa is confused as he unwillingly didn't know. When the Theater door falls onto the ground, Parappa and Matt are spooked, when they see a ghost, they start to panic and hit the street light causing it to break and fall onto the theater sign on the roof causing it to fall. PJ finds out the ghost was just from a movie poster. While walking down the street, Katy notices PJ who is carrying Parappa and Matt. However, Katy's arm is grabbed causing her to scream in shock. Katy finds out is was Dorothy and isn't so happy to see here. Dorothy asks her to come in to try her baked food as she wants Katy to try them, Dorothy drags Katy inside but Katy isn't happy to be with Dorothy and quickly eats Dorothy's cookies. Dorothy begins to tell her story when the the scene transitions to Gaster who plans to give the theater in Parappa Town what it deserves. Dorothy explains her dream is be a show dancer for her youth's sake to be a star dancer. When Katy tells Dorothy she has to go. Dorothy states that she must get going which confuses Katy, Later, Sunny and Paula are enjoying an Ice-cream cone from Bon's Ice-cream truck at the park where Katy meets up them. Meanwhile, Gaster is hiding from them plotting his next bad scheme to cause trouble in Parappa Town. When is notices the ice-cream cone Sunny was eating, he begins to imaging an ice-cream cone when Groober appears and steals Gaster's Ice-cream from his thoughts as Gaster chases after him. Paula asks if Katy is going to the theatre but Katy isn't interested. Meanwhile, Parappa and Matt are carrying a bat and a racket thinking there is a ghost in the theatre planning to strike it down. While Katy is walking down the street, she hears footstep noises coming from inside the theatre and finds out that Dorothy is practicing her dancing. When Parappa and Matt are outside the Theater, Matt states to hit together in the same place. They begin to charge inside knocking Katy over when they think she is the ghost from earlier. Katy explains she is not a ghost and she heard Dorothy practicing her dancing. Katy wants to show them that Dorothy is practicing her dancing, when Parappa and find out the Ghost they thought they saw was actually just a movie poster.
When Katy, Parappa and Matt watch Dorothy dancing on stage. Dorothy foot breaks through the wood causing her to trip over breaking the curtains from the stage. While Matt and Parappa are laughing at Dorothy's poor performance, Dorothy embarrassed runs away while Katy follows her. Parappa finds an old portrait on the floor and blows the dust off it finding a picture of a couple dancing. When Katy meets up with Dorothy outside her house, Katy apologizes for her friends behavior. Dorothy states that she should give up on her dream of being a star dancer.
Dorothy states the Theater in Parappa Town will soon be destroyed along with her memories performing there. Katy states that she somewhat understands what Dorothy means and thanks Katy before walking inside the house. The cooker then rejects what appears to be movie film that Katy finds. Meanwhile PJ,Parappa and Matt are having ice-cream when Katy says he has something important to show them. The two go to Parappa's house and use an old machine to run the film. The film shows a young man and woman dancing at the theater. Katy is surprised to see Dorothy was an actual dancer and wonders who her dance partner was. Parappa and Matt were so surprised to find how beautiful Dorothy was when she was young. On their way back from the movie theater Paula and Sunny find Parappa rebuilding the theater and decided to help. Once the theater is finished Parappa and the gang deliver the flyer to let everyone know about the show, as they do that Pinto records them on her camera. But little did they know, Gaster plans to ruin the show and gets rid of the flyer so that no one will come to the show. Parappa and company are very excited and anxiously wait for the guests to arrive. When no guests come to the theatre. Parappa goes and investigate why no guests are coming, Pinto decides to follow Parappa and learn that all the flyers are either thrown away or flying away. Parappa pleads his Father to go but he drives off with the two very upset. Gaster laughs mischievously until a mysterious person goes inside. Dorothy explains that no one wants to watch her dance. The mysterious person reveals himself to be Dorothy's last dance partner Paul who found a crumpled flyer arrive to him at the beach.
When Katy announces the two to do their dance, the power goes on the fritz for a short time before coming back on. Dorothy and Paul do their dance performance, Gaster begins to peek inside to see what is happening. When the show is over, The gang; including Gaster, applaud for Dorothy and Paul's performance. Gaster holds a sign protesting to stop the theater from being destroyed which doesn't work as a result. Afterwards Parappa looks up and sees the flyer flying away.