Scaredy Squirrel is afraid to leave his nut tree because he's afraid of the unknown "out there", but when a bee forces him to leave he realizes that it's not as scary as he thought.
Exhausted due to lack of sleep because he wants to avoid having bad dreams, Scaredy Squirrel finally devises a Bad Dream Action Plan which includes a fire extinguisher to snuff out dragons and a fan to blast away ghosts.