Meanwhile, a couple of hikers get lost in the woods and happen upon a cottage. A friendly old lady invites them in, and before we know it the hikers are bound and the old lady is carving up the guy while a pasty faced child peers in through a window outside.
Dean and Sam later interview the lone survivor, and the details of the crime begin to click for Sam and Dean. After a bit of research, they figure out that the crimes come from fairy tales. They notice a pumpkin and some mice on a doorstep and it reminds them of Cinderella. They enter the house and find a girl chained to a stove. Bingo. During the event, the girl shows up and as they approach she disappears leaving an apple behind. The guys decide this is a clue to the girls identity and check the hospital for comatose patients.
At the hospital they find the patient they are looking for, the daughter of a Dr. Garrison. He is reading her the big bad wolf. We split off and find the big bad wolf story line playing out with an old lady and a bum. The comatose girl is projecting the scenarios from the stories into the real world.
Dean goes out to find the Red Riding hood who is in trouble while Sam tries to convince the father that his daughter is killing people by psychically lashing out. Dean winds up wrestling with the “big bad wolf” while Dr. Garrison confronts his daughter's spirit in her room and he finally allows her to die. At that moment “the big bad wolf” snaps to and has no memory of why he is there.
The brothers get together with Dr. Garrison to wrap up business and he talks about his relief in letting his daughter go. Dean suggests to Sam that this would be good advice. Later, Sam slips out of the hotel room and summons the Crossroads demon. He threatens her with the shooter, but she is unmoved. She is curious how Sam got the gun, and surmises it was Ruby.
Crossroads tries to convince Sam that allowing the deal to go through would be better for Sam, implying that he is Dean's shadow and would be better off without him. Crossroads tells Sam that killing her wouldn't break the deal because the contract is held by another demon. She refuses to tell Sam who the demon is, so he shoots her in cold blood.
As the first entirely episodic and mostly demon free Supernatural of the season, “Bedtime Stories” does a great job of proving how well Supernatural can work as just a storytelling device. Great episode, and the confrontation between Sam and the Crossroads demon was a classic Supernatural moment. ''