At the beginning of time, all the gods are assigned their duties, with Morpheus as god of sleep; his brother Phantasos, however, really wanted the job and centuries later is still jealous. In an effort to make Morpheus look bad, he spreads his own blanket of nightmares over the world, causing Hercules and Phil and the rest of Greece to have bad dreams. On Olympus, an emergency meeting is called, for Morpheus has replaced Hades at the bottom of the Deity Approval List. Zeus gives him till the next day to discover the problem, so Morpheus summons Hercules and Phil. He asks them to confront their fears in dreamland, as he suspects Phantasos. Hercules has a dream of a hydra, while Phil sees his mother; Hercules confronts it rather than running away, and it turns into Phantasos, who he forces to come to reality. Morpheus has his approval bumped up, and Hades retains his place at the bottom, and Morpheus asks Zeus to create a new deity- god of dreams, with Phantasos handling the job.