In this cartoon-within-a-cartoon, Bugs and Elmer are in the midst of their usual hunting-chasing scenario. Elmer quits, angry because he feels the writers will not "allow him" to catch Bugs.
Bugs worms his way into Elmer's dream, (a by-product of Elmer's nap) with sleeping pills in order to torment the inept hunter with nightmare imagery; Bugs chooses 'zillions of red and yellow wabbits' to start off the agony. Later, Bugs runs Elmer over with a "train" made of rabbits.
Elmer's failed pursuit of the "wabbit" through the surreal landscape, as well as down connected rabbit holes, allows Bugs to dress Elmer in drag (wig, dress, lipstick et al), making Elmer look like Rita Hayworth.
Bugs inspects his handiwork, then introduces Elmer to a trio of (literal) wolves, lounging by the sign at Hollywood and Vine. Upon noticing "Elmer", one wolf cries out ("hooooow old is she?"), right before another wolf begins flirting with Elmer. The latter causing the gender-morphed Elmer to exclaim "Gwacious!", and flee from the wolves, pausing long enough to ask the audience, "Have any of you giwls evew had an expewience wike this?".
In an attempt to "help", Bugs persuades Elmer to follow a mad dash towards stage right, as Bugs plays the old gag "run 'this way'!", putting Elmer through a bizarre series of steps which include him running on his feet and on his hair, hopping like a frog, as well as Russian folk dancing (Hey!).
Bugs and Elmer jump off the edge of the dreamscape. During the descent, Bugs drinks some "Hare Tonic - Stops Falling Hare" and screeches to a halt. The dream-Elmer lands roughly back in his own body and awakens. Elmer swiftly rejoins his job back at Warner Brothers; the episode closes with Bugs happily speaking the catchphrase from the "Beulah" character on the radio show Fibber McGee and Molly, "Ah love dat man!"