The film opens with the song "Trick or Treat for Halloween," the lyrics of which tell the story's lesson, one must be generous on Halloween or face trouble.
One Halloween night, Witch Hazel observes Huey, Duey, and Louie going trick-or-treating. The trio, dressed as a ghost, a devil, and a wizard, go up to the door of their uncle Donald Duck's house under a covered porch and ring the bell. But instead of giving them the traditional candy, Donald deliberately puts firecrackers in their bags, then pulls a string leading to a rigged bucket of water hanging under the porch roof and tips it on the boys, causing the boys to get soaking wet. Donald laughs, says "So long, Boys!", and the discouraged nephews go and sit on the curb.
But Hazel, who was secretly watching the drama unfold, tries to comfort the boys. When she discovers that they believe in "real witches," she decides to help them get their treats from Donald after all. At first Hazel tries to convince Donald herself, but he deliberately pulls her nose, stretching it, then lets it go, and dumps another bucket of water on her, making her also look soaked and wet. Realizing that the job may be harder than she thought, she tells the boys that they will use to her magic for this situation.
At another location, the nephews watch Hazel concoct a magic potion in a large cauldron. In a scene paying homage to Shakespeare's MacBeth (see Three Witches), Hazel adds ingredients somewhat toned down from the play. They include: Eye of needle, tongue of shoe, hand of clock that points at two, Neck of bottle tail of coat and whiskers from a billy goat! Hazel tastes it and spasm before gurgling "Kids, this stuff's loaded!" She then fills a spray bottle of the potion and returns to Donald's house with the nephews.
Hazel sprays a Jack-o'-lantern, a can of paint, a gate, and three fence posts with the potion and they become an animated chorus of ghosts singing the theme song. A terrified Donald instantly agrees to treat the boys, but when Hazel refers to him as a pushover, he realizes he's being forced to do this and puts everything back. Donald locks his pantry and swallows the key. Hazel then uses the potion on Donald's feet (who are now controlled by her), and commands them to "kick out that key." But when the key is kicked out, Donald throws it under the pantry door. Hazel then becomes mad and sprays Donald's feet again, ordering them to "smash that door down" with Donald. After several attempts, Hazel tells Donald to "take a longer start, ABOUT A MILE OR TWO!" and Donald literally runs far before charging at lightning speed and crashes, finally breaking down the pantry door and is left unconscious on the floor in defeat.
In the end, Huey, Duey, and Louie collect their treats and Hazel departs. A final shot shows the enchanted Jack-o'lantern suddenly pop onto the screen saying "Boo!" to the viewers before smiling.