Buffy is patrolling in a cemetery at night, but there is something wrong with her and with the demons she meets and kills: they are all singing and dancing. Buffy sings about her life after returning to Earth, and the way she feels detached from it ("Going Through the Motions").
The morning after, the friends find out such things have happened to them all. They suddenly burst into song again, first wondering what can possibly be the cause for this ("I've Got a Theory"), including a novel idea by Anya ("Bunnies"), and then, guided by Buffy, asserting their ability to deal with it together ("If We're Together"). They further learn that all the people in Sunnydale are forced to sing about their inner feelings ("The Mustard").
Later Tara sings a love song to Willow about the difference she's made in her life ("Under Your Spell"). Xander and Anya sing together about things they would otherwise have never told themselves or each other, namely their fears about their coming marriage ("I'll Never Tell"), and Spike sings to Buffy about the torturous nature of their relationship ("Rest in Peace").
It seems that a new unnamed demon in town (referred to as "Sweet" in the credits) is responsible for all the singing. Unfortunately, some people are singing and dancing so much that they spontaneously combust, because of the dramatic release of their pent-up emotions. Sweet has Dawn kidnapped by his minions, interrupting her as she begins singing a lament about her life ("Dawn's Lament"). When Dawn wakes up in The Bronze, she and three of Sweet's minions engage in an interpretive dance; this is Dawn's attempt to escape. ("Dawn's Ballet") Sweet explains that he thinks she is the one who summoned him, and intends to take her to the Underworld and make her his queen ("What You Feel").
Meanwhile in the Magic Box, Giles, realizing that his continued presence encourages Buffy to remain emotionally dependent on him and preventing her from maturing, decides to return to England for good, despite the pain of abandoning his surrogate daughter ("Standing"). Tara finds out about a forgetting spell Willow had cast the evening before to make her forget about a fight they had, and decides to break up with her. As Willow and Buffy chat distractedly, Giles and Tara reflect on their choices and the agony they are causing them ("Under Your Spell/Standing (Reprise)").
Spike, with one of Sweet's captives in tow, discovers where Sweet is holding Dawn. Xander, Anya and Willow are eager to help save Dawn, but Giles insists that Buffy should go alone. Spike, dismissing Giles' stubbornness, offers to back Buffy up, but Buffy takes him to task regarding his wish for her to stay away from him, and a humiliated Spike skulks away, telling her he hopes she will dance until she burns. Buffy leaves alone, once again singing about her inability to feel, as both a conflicted Spike and the Scoobies express their desire to fight along with her, accompanied by Sweet, who summons them in song ("Walk Through the Fire").
Arriving at The Bronze, Buffy starts to sing and dance defiantly, cynically expressing her current condition and the hardships of being the Slayer. Then she finally reveals to Sweet and her friends that, by resurrecting her, they had ripped her out of heaven rather than rescuing her from a hell dimension as they thought. As her friends react in horror to the admission, and once she has vocalized her anger and despair, she dances ecstatically to the point of fuming, in a somewhat suicidal effort. Spike arrives and stops her mid-dance, telling her that the only way to mend her wounds is to carry on living, "so one of us is living" ("Something to Sing About"). Dawn ends the song by saying "The hardest thing in this world is to live in it." - the line Buffy used when speaking to Dawn right before her death.
Applauding, Sweet prepares to leave with Dawn, but it turns out that it is not Dawn who had summoned him, but Xander - who had not understood the implications - leading to the demon giving up on the queen matter and vanishing. As he leaves he points out that due to all the hidden feelings he caused them to reveal to each other none of them can claim "it ended well" daring them to say that they are really happy "once more with feeling" ("What You Feel (Reprise)"). The group does, questioning the pyrrhic victory they've achieved and what to do next ("Where Do We Go from Here?").
The episode ends with Spike and Buffy kissing as the curtains fall, as predicted in the previous song's final verse, as the chorus swells one last time ("Coda").