The main four boys (with Tweek rather than Kenny), go to see a "re-re-re-release" of Star Wars Episode V: The Empire Strikes Back. Before the movie, a trailer of the (real) re-release of E.T. the Extra-Terrestrial is shown, which points out the various edits made to the movie, e.g. the guns that the special secret agents point at the children have been changed to walkie-talkies, and the word "terrorist" has been changed to "hippie".
A trailer of the (fictional) "re-re-release" of Saving Private Ryan is then shown where similar edits have been made; the soldiers' guns have been digitally changed to walkie-talkies, and the word "Nazi" has been changed to "persons with political differences" (It should be noted that the word "Nazi" is never spoken in the real film). The four complain about how directors edit their movies to make them more family-friendly or politically correct. Finally, the movie they came to see appears, but not before a banner is displayed on the screen (and also read by an announcer) to note the word "Wookie" has been changed to "hair challenged animal" and that the entire cast has been digitally replaced by Ewoks.
They leave the theater and decide to form an organization to campaign against changes to classic movies. Cartman then writes "Free Hat" on the advertising poster to persuade more people to come. Tweek is charged with the task of making fifty paper hats, but he only manages to make fifteen (although he stayed up all night, only slept for one hour, and dreamed about making hats). Many more people than were expected show up, not for a free hat, but for the boy's cause, which they think is to organize a movement to free Hat McCullough from prison. When the boys state their real cause, the group are a little enthusiastic with this cause as well and suggest they work on both causes: Stopping Film-makers from editing their movies and freeing Hat McCollough and the group run outside, chanting "Free Hat! Free Hat!"
Later, the boys are invited onto Nightline with Ted Koppel to talk about their cause. Koppel reveals that Hat McCullough is a convicted serial killer of twenty-three babies & toddlers and Tweek has to defend their supposed support of toddler murder. When asked what he finds positive about toddler murder, Tweek eventually answers "It's easy?". Koppel agrees with the statement. While there, the boys meet Steven Spielberg and George Lucas. Spielberg justifies his changing of the movies as "improving history." The boys then argue that changing E.T. is like changing Raiders of the Lost Ark, but this only inspires the filmmakers to do just that. The boys return to their club to tell their members about saving the film. They plan to infiltrate Lucas's home, Skywalker Ranch, and steal the original negatives of Raiders of the Lost Ark to prevent it from being remade. Despite the option to stay and help the boys, all of the members go out to talk to the governor about freeing Hat (as they say he killed the babies in self-defense, which would technically classify Hat as a mass murderer rather than a serial killer). Tweek at first refuses to join the boys with getting the film, but relents when his friendship is threatened.
Tweek, Cartman, Stan, and Kyle later break into The Skywalker Ranch. They look through his vault, skimming past titles such as "First Day of School, Digitally Enhanced", "Wedding Video, Digitally Enhanced", and "Kids First Swimming Lesson w/ Digitally Enhanced Weather" until they find the negatives. Just as they try to collect the negatives, Lucas confronts them. After pleading with him, the boys try playing a "cool island song" to try to "melt his icy heart," but they end up arguing about what kind of heart he has and what type of island song they should be playing. The next day, Lucas calls the police, and the boys attempt to convince him to turn away from his evil master (Spielberg). Just as he was about to give them the reel, Spielberg arrives, flanked by guards brandishing walkie-talkies ala E.T. Torn between the boys and Spielberg, Lucas relents and gives the reel to Spielberg. Spielberg then takes the boys prisoners to make them guests of honor at the premiere of the remake of Raiders of the Lost Ark, but Tweek escapes just before they are cornered.
Later, back at the club, Tweek alerts everybody else to the situation at hand, but they were all upset that the governor wouldn't listen to them about pardoning Hat. Tweek then explains what he and his friends had to go through in their attempt to get the film, but the other members decide to adapt the island song strategy for their own cause, planning to use a "fresh island song" to "cool the governor's hot temper".
Meanwhile, Spielberg and Lucas (now joined by Francis Ford Coppola, who had recently re-edited Apocalypse Now at the time of the episode's airing) and their entourage (including the three prisoner kids) start making their way to the premiere. Like in Raiders of the Lost Ark, their way means walking across a desert while carrying the new print inside an ark. Thus, with the film situation left only to Tweek, he ambushes the convoy from an upper desert hill wielding a bazooka which he points to the ark. He threatens to blow it up unless his prisoner friends are released (except for Cartman, who they can keep). The negotiation ends when Spielberg (who's amazed by Tweek's persistence) steals a walkie-talkie from one of his men and forces the others to step away from the ark. He then invites Tweek to "blow it back to God", but reminds him all his life has been in pursuit of seeing a great film, and thanks to the new "effects beyond your wildest dreams" he wants to see it screened just as much as Spielberg does. Tweek pauses and is captured as he hesitates.
Later at the premiere, as the movie begins, Stan tells his friends (all of whom are tied to poles) to look away from the screen, warning them that the film will be terrible. They do, while the rest of the audience continues watching the film. At first, they're awed by the film, but upon seeing the Natives who chase Indiana Jones were digitally changed to Ewoks, they react negatively. They then realize the new version is awful. Spielberg, Lucas, and Coppola become frightened. Suddenly, parodying the climax of Raiders of the Lost Ark, the film shoots rays at the audience and kills them all. Lucas and Coppola have their faces melt, and Spielberg's explodes. When there's finally silence, the kids find themselves untied and open their eyes. Upon seeing bodies everywhere Cartman comments, "Man, that new version must have sucked balls."
Back in South Park, the boys think that they are going to be congratulated for stopping Spielberg and Lucas. However, the boys (in particular Tweek) are congratulated for getting Hat released from prison. Despite the fact that Hat is crazy and asks for a baby, the crowd cheers for him and presents him with one. The boys say that what they did might not matter now, but will matter later.
When Tweek asks what if someone else tries to change the movie, Stan answers that it's "somewhere safe. Somewhere where...nobody will ever find it." The episode ends as we see an old man placing the original prints inside a box, which he then places inside a warehouse named "Red Cross 9/11 Relief Funds"—a nod to the close of Raiders of the Lost Ark, which in itself is a nod to Citizen Kane.