Mr. Largo is helping the Springfield Elementary School band prepare for their big performance at the state fair. After a suggestion by Lisa that they are doing the same old songs, they perform a different song, which is James Brown's "Living in America". They perform the song, but lose to Ogdenville Elementary School, who performs "Stars and Stripes Forever" using red, white, and blue glowsticks, forming a flag, which was against the rules as the competition forbade use of props. Meanwhile, Homer enjoys Bachman-Turner Overdrive. After they win, Lisa accuses Ogdenville of cheating, later writing a letter to President Clinton. At the fair, Homer and Bart see Duncan, the diving horse, who dives into the pool. Homer and Bart later take Duncan home after his owner is accused of animal cruelty and flees (during this moment, the Comic Book Guy rants that the family once had a hard time owning a horse).
The family does have problems taking care of Duncan, however: it costs them $500 a week to keep him. Homer and Bart try to think of a way that Duncan can make money to help offset the costs of keeping him. Duncan makes an excellent placekicker, but NFL league rules forbid horses from competing. After Homer denounces the rules, Bart discovers that Duncan is fast and suggests that he should be a racehorse. Homer enters Duncan at Springfield Downs, with Bart (in pajamas) as the jockey; they lose as Duncan, frightened, refuses to leave the stall. Homer and Bart find a new strategy for Duncan to win, by making him into a Dennis Rodman look-alike, "Furious D", complete with purple hair and a nose ring. He intimidates the other horses (and headbutts several of them) and wins the next races. They go on to win a series of races until Homer discovers the secret lair of the losing jockeys. They reveal themselves to be murderous elf-like creatures who want him to throw the upcoming race. They threaten to eat Homer's brain if he doesn't comply. At the Springfield Derby, Duncan surprisingly wins the race, and the furious jockeys chase after Bart and Homer. Marge and Lisa foil the jockeys by spraying them with a hose and stuffing them in garbage bags. President Clinton comes to see Lisa at home and present her with a plaque.