Commissioner Gordon goes in for a dental appointment, only to find the Joker in the place of his dentist. Harley Quinn ties him to the chair, and just as Joker is about to kill the Commissioner, Batman crashes in. He tosses a pair of chattery teeth to the floor with disdain, and tells the Joker that the clue was easy to figure out, calling him sloppy and predictable. Harley interrupts Batman's bashing and claims credit for the idea, then stuns Batman with a spray of gas. She tosses out a pun about it, much to the Joker's outrage. As they make their escape, Joker tosses a grenade into Gordon's lap, but Batman hurls it out the window in the nick of time.
In the Funnibones warehouse, Joker is poring over various plans to kill Batman (in an appropriately humiliating yet comedic manner). He is so obsessive that he fails to notice Harley prancing around behind him in an alluring negligee, and when she announces herself, he irritably orders her away. Joker laments that his trap at the dentist's office was, indeed, "sloppy and predictable," and he must try harder to come up with the "perfect" means of defeating the Dark Knight. A little impatient, Harley asks "why don't you just shoot him?" However, the idea of murdering his archenemy in such a mundane manner enrages him. With mounting fury, he tells her that Batman's death must be "nothing less than a masterpiece!" and squirts his acid flower at a dummy of Batman, barely leaving Harley enough space to duck.
Then, out of the corner of his eye, Joker notices one of his old blueprints and becomes excited at his plan for "The Death of A Thousand Smiles" — lowering Batman into a piranha tank to be devoured — but then remembers why he dropped it in the first place: because he couldn't make the piranhas smile, defeating the whole theme. As he slumps in dejection, Harley resumes her advances - to which the Joker responds by kicking her through the door into a pile of garbage, near Bud and Lou.
Alone, Harley bemoans the sorry state of her life: whatever career she had as a legitimate psychiatrist is long gone, she's a wanted fugitive all over the country, and hopelessly infatuated with a psychopath who treats her like dirt. She starts to wonder where things went wrong for her... but her thoughts quickly swerve away from putting any blame on her beloved "pudding," and instead she concludes that Batman is the one who has always persecuted her happiness, as he has "from the very beginning..." Few years ago, Dr. Harleen Quinzel was a career-orientated psychiatrist interested in "extreme personalities," which led her to take an internship at Arkham Asylum. There, she met the Joker, who quickly started to work his charms on her. After placing a rose with a note inside her office (revealing that he was somehow capable of escaping his cell unseen), Harleen confronted him in private and threatened to turn him in, but Joker waved her off, saying that she would have already done it had she really meant to. He teases her by saying he likes her name, which could be easily tweaked into "Harley Quinn," a spin on the word "Harlequin."
Harleen was not amused, and walked away coldly, but then Joker said he would be willing to confide in her in therapy. The ambitious psychiatrist saw this as a potential landmark in her professional career, and grabbed the opportunity. After nearly three months of background research, Dr. Quinzel arranged a session with the Joker. She believed herself ready for any tricks he might pull on her - but instead she found him opening up to her. He confessed to having a traumatic childhood, with an alcoholic father who frequently beat him for no apparent reason. The Joker said that all he wanted to do in life was to make people laugh, and when he told her about some of his early routines, she found herself laughing helplessly with him - and then crying as he then said how his father responded to his jokes with more beatings. But, he shrugged, that's one of the inescapable truths of comedy: "You always take shots from folks who just don't get the joke." In a way, he mused, his father and Batman were a lot alike: their problem was, they just didn't "get" him. After several of these sessions, Dr. Quinzel became increasingly sympathetic to her patient, believing that his traumatic childhood had driven him to a life of crime, while Batman's continued persecution only prolonged his misery. Soon, Quinzel and her patient switched roles: she started to confide in him, and he reacted with understanding, explaining how, in her ambitious drive to make a success of her career, she had somehow forgotten how to have fun, and was needy for someone who could make her laugh. There was no question that now Dr. Quinzel had fallen head-over-heels in love with her patient.
Shortly after his latest esape from Arkham, Joker was recaptured and brought back by Batman, badly injured. The sight of her beloved, swathed in bandages, sent Dr. Quinzel over the edge. She stole a harlequin costume and various trick gags from a novelty store, then sneaked back into Arkham, neutralized the guards and broke the Joker free. Dubbing herself Harley Quinn, Harleen embraced a life of crime with her newfound love.
Harley decides that as long as Batman is around, she and Joker can never be happy, so she takes matters into her own hands. She sends a videotaped message to the GPD, warning them that Joker has gone totally crazy and is preparing a gas bomb that could kill the entire city. Telling the police that she has finally come to her senses, she promises to help them stop the plan, if they can protect her. Batman meets her at the docks, where she delivers a set of papers that seem to confirm the Joker's heinous plan. As Batman examines them, the Joker appears on a boat speeding towards the pier, calling Harley a traitor and opening fire with a submachine gun. Batman dives on top of Harley to protect her and hurls a batarang at the Joker, which cuts his head clean off. Batman looks again and sees that he's actually decapitated a robotic dummy, but his moment of shock is all Harley needs to inject him from behind with a sedative. When Batman wakes up, he has been chained from head to toe, relieved of his utility belt, and is hanging upside down over a piranha tank inside the empty Aquacade aquarium. Harley, noticing him awake, explains that the story about the gas bomb was a fake: her real goal is to finish him off, using one of her beloved's plans. All it needed, she realized, was to have Batman upside down when he was lowered in, thus making the piranhas' downturned mouths look like smiles. As Harley prepares to finish Batman off, she admits to some small regrets, since she's really enjoyed some of their escapades. But, in the end, all she wants to do is get Batman out of their lives so she and her "loving sweetheart" can settle down.
Hearing that, Batman, incredibly, begins laughing derisively. Unsettled by the fact that Batman never laughs, Harley tells him to stop, but then Batman lashes out at her with scorn, telling her that Joker has tricked her into thinking he actually cares for her, when she's nothing to him but an occasionally useful "hench-wench." Angrily, Harley rebuts that Joker trusts her, he confided secrets to her... to which Batman responds that Joker told those same lies many times before, and to many other people. Harley is severely shaken, but screams through her tears that Joker does love her, and killing Batman will win him back. Without further ado, she starts to lower him in, but Batman points out that Joker won't believe her, since the piranhas won't leave a body behind as proof. Nervously, Harley ponders her next move...
Back at the Funnibones warehouse, Joker is still poring over his plan ideas, while the phone is ringing incessantly. Fed up, he grabs the phone, and hears Harley's voice on the other line. But when he hears what she has done, Joker is livid at being upstaged and speeds to the Aquacade in his car. On his arrival, Harley runs lovingly toward him... only for him to strike her viciously to the ground. Confused, she asks what is wrong, and he says that only he can be allowed to kill Batman. Harley starts to explain that it is his plan she is using, only she has improved it - then Joker snatches the blueprints away and rips them to shreds, ranting that any joke that has to be explained to the audience is no joke at all. Menacingly, he advances on Harley, counting her as just one more person of the many he's had to cope with, who "don't get the joke" - and knocks her out the window, to plunge several stories down into a garbage heap.
Lying bruised but alive, Harley mumbles that it was her fault for not getting the joke.
Joker promptly swings Batman out from over the tank and lowers him to the table, while apologizing for Harley's impetuosity. He cheerfully proposes that they forget the whole fiasco occurred and take a raincheck for their next confrontation. He starts to walk away, whistling... But then he realizes that Harley has given him an opportunity too good to miss after all, and he'll go ahead and kill Batman himself. He flips the still-chained Batman onto his back and takes aim at his forehead with a gun, tossing out a lame pun and rejoicing that Batman is "going out on a laugh after all!"
But just as he pulls the trigger, Batman kicks the gun upward, so the shot shatters the piranha tank, releasing a flood of piranha-filled water that knocks Joker down. As Joker thrashes around, trying to pull off the piranhas nipping at his flesh, Batman flips to his feet, grabs his utility belt with his teeth, and manages to extract a lockpick and release his chains. Joker beats a hasty retreat, and Batman dashes after him. The Joker jumps out of the building, falling on the top of a moving train. While he pokes fun at Batman for not catching up, the Dark Knight somehow appears behind him. Batman confides that Harley actually came very close to killing him - much closer than the Joker ever has, in fact - and that he had no way out other than to trick her into calling him. Batman then teases the Joker by calling him "Puddin'" — Harley's pet name that he so loathes. Joker goes berserk and launches himself at Batman, leading to a brutal fistfight between the two. As the Joker finally pulls out a knife, Batman delivers such a fierce uppercut that it sends Joker flying off the train and falling, screaming, down a smokestack.
Back in Arkham, the inmates are watching Summer Gleeson on the news. She reports that Joker's body has not been found, but, although he has cheated death many times before, he is extremely unlikely to have survived this last encounter with Batman.
An injured Harley is wheeled to her cell, vowing internally to turn over a new leaf and leave the craziness behind her, finally seeing the Joker as the murderous psychopath he really is... but then she sees a flower and a get-well card signed "J." sitting on her nightstand, and that is all it takes to change her mind.