One morning, when SpongeBob SquarePants goes out of his house, he sees that Plankton has taken over Bikini Bottom and used multiple tank-like vacuums to suck away all of the town's civilians. He sees Goddard coming out through a portal and receives a message from Jimmy Neutron. He follows Goddard through the portal to Jimmy's lab and meets Jimmy Neutron, Danny Phantom, and Timmy Turner. Since SpongeBob is an aquatic being in need of water, Jimmy uses one of his few non-backfiring inventions to coat SpongeBob in a coat of self-regenerating moisture. Jimmy tells his inter-dimensional guests about his new invention, The Universe Portal Machine. As he says, it allows people to travel to other worlds. But Prof. Calamitous has been spying on him, stole his idea and created his own Portal Machine. With it, he brought Plankton, Vlad Plasmius, and Denzel Crocker to his dimension. They formed a Syndicate and proceed to steal energy from all the worlds. Since our heroes do not know where Calamitous lair is, they start with saving all of their worlds first.
Danny suggests that they go to his world first, so Jimmy uses the portal machine to take them to Casper High School in Amity Park. However, much to their surprise they end up in the throne room of Vlad's new castle, which he built over Casper High. Vlad reveals that he is using his personal ghost-portal to siphon ghost energy from the Ghost Zone to help further the Syndicate's ultimate plan. Also, as a precaution, Vlad had captured (unknown to the rest of the good guys) Danny's parents. As usual, Vlad tries to win Danny over to his side, but Danny rebuffs the offer as usual. Confident, Vlad knocks them unconscious and imprisons in the Ghost Zone Prison now under his control. Befriending the imprisoned Box Ghost, the Nicktoons escape their holding area and proceed onwards with Danny phasing through the walls and deactivating the machines that keep physical beings from escaping. However, at the exit, the meet the Warden of the Prison, Walker, who is not too happy with their prison break. Knocking Walker out, Danny leads the heroes to the ghost-portal leading to the basement of Fenton Works, where he quickly lies that he has no relation to the Fentons and that they are the experts in Ghost Hunting. They exit Fenton Works and encounter Danny's friends, Sam and Tucker, who tell them some of the people in Amity Park have been possessed by the ghosts released from Vlad's portal.
Next, our heroes go to Bikini Bottom to fight Plankton. They meet Sandy, and follow her to the Krusty Krab. Sandy tells the Nicktoons that they should find some guards which should help them find Plankton and the Jellyfish Factory. Fortunately, they found the guards. Sandy then explains that Plankton uses the harvesters to capture jellyfish, and is extracting power from their sting in the factory. Plankton also captured Mr. Krabs. Sandy told the Nicktoons that they must go into the Jellyfish Factory and free all the Jellyfish. After Timmy asked if they have any secret agents (since he thought that it's like a spy movie), Sandy said that they have an agent in Jellyfish Fields, who is revealed to be Patrick, but he's been captured by a Jellyfish harvester. After destroying all the harvesters, the Nicktoons go to the factory, but during the journey, they find themselves on the Flying Dutchman's ship and the Flying Dutchman is going to make them his new crew for all eternity. Luckily, the Dutchman frees them after they bring back his old crew. When the Nicktoons arrive to the Chum Bucket, they free Patrick and all the Jellyfish by opening the emergency vents. Later, they went up to the top of the Chum Bucket, they beat Plankton and rescue Mr. Krabs. The Nicktoons find out that the villains are extracting energy for a Doomsday Device.
In Dimmsdale, the Nicktoons see Crocker has made the fortress made of gold. They also find a rainbow of pure Fairy Magic from the Fairy World that is ending there, so they go in. After they re-activate the prisms, they get transported to Fairy World, where they meet Jorgen Von Strangle. Jorgen explains that Crocker is extracting the magic from the Big Wand to feed the Doomsday Machine. After freeing the fairies, they go to The Big Wand, where they defeat Crocker. Danny figured out that every time they beat their enemies, they're running away, which was a part of a plan.Finally, the Nicktoons return to Retroville, where Jimmy finds Cindy in his lab and he also receives a message from Calamitous that they've almost finished the Doomsday Machine and the Nicktoons can't stop them. After SpongeBob notices that Goddard has fleas, Jimmy says that Goddard doesn't get the fleas. Then, he figured out how Calamitous could spy on him; he was using a flea-bot inside Goddard. So the Nicktoons shrink themselves down and go to Goddard's stomach. They beat a lot of mini flea-bots throughout Goddard, and Danny, Timmy and SpongeBob gain Goddard's trust. They go to Goddard's head and beat the giant flea-bot. Jimmy used the flea-bot's circuitry and locate Calamitous' secret lair, which is situated under an old warehouse. When they get to Calamitous' Doomsday lab, they find The Syndicate in a wheel-like machine which shields them. They beat the Syndicate but they see that the Doomsday Device is still counting down to destroy the universe and it can't be stopped. Luckily, SpongeBob unplugs the Doomsday Machine and saves the universe.
After putting Calamitous and Plankton in jail, the Nicktoons said themselves goodbye, but before they went, Jimmy gave them the Neutronic Recallers in case of another event like this. SpongeBob said that Jimmy can visit him any time he likes, but then he said he should get going, so he won't be charged by Mr. Krabs for wasting his time (even though SpongeBob and the others saved his life), Danny gave Jimmy a copy of the Fenton Thermos (since the copy Thermos had Vlad trapped inside, Danny used Jimmy's Matter Duplicator to make a copy), then Timmy thanked Jimmy for lending him his Hyper-Cube for holding Crocker until Timmy and his fairies get back to Dimmsdale. After this, Jimmy says a familiar line: "Cindy, get out of my lab!"
- When Danny goes into his invisible form, he states, "Going Ghost!" However, this is improper because this is what he says when he goes from human to ghost form.
- In the console version, unless Jimmy somehow got Danny after and quicker than he got SpongeBob, it is unknown how Danny did not know that SpongeBob talked as he should have heard and possibly seen SpongeBob taking in his part of the conversation which occurred moments earlier.