Continuing from The Rocky Horror Picture Show are the characters of Brad and Janet Majors (now portrayed by Cliff De Young and Jessica Harper), now married. The film takes place in the town of Denton, USA, which has been taken over by fast food magnate Farley Flavors (also De Young). The town of Denton is entirely encased within a television studio for the DTV (Denton Television) network. Residents are either stars and regulars on a show, cast and crew, or audience members. Brad and Janet, seated in the audience, are chosen to participate in the game show Marriage Maze by the kooky, supposedly blind host Bert Schnick (Barry Humphries). As a “prize”, Brad is imprisoned on Dentonvale, a soap opera that centers upon the local mental hospital run by brother and sister Cosmo and Nation McKinley (Richard O’Brien and Patricia Quinn).
Janet is given a taste of showbiz as Farley molds her into a singing diva superstar in an attempt to take her away from Brad. Her compliance is assured through the use of drugs supplied by the McKinleys. Betty Hapschatt (Ruby Wax) and Judge Oliver Wright (Charles Gray) investigate Farley and other people involved in DTV and eventually discover that Cosmo and Nation are not doctors, but merely character actors, and Farley Flavors is Brad’s jealous, long-lost twin brother, seeking to destroy Brad and take Janet for himself. The pair rescue Brad from Dentonvale and have him confront his twin on his show Faith Factory. Farley imprisons the three and Janet, but they manage to escape in a car along with a local band while the remainder of Denton’s citizens follow Farley and commit themselves to Dentonvale.