Sue Ellen receives a gift from her pen pal: a coat made of yak wool and wears it to school. Arthur thinks it makes her look like a sheep dog, and makes a constant volley of jokes about it; at first, Sue Ellen rolls with it, but she and everyone else starts getting annoyed by it after a while.
Arthur draws a picture of a sheep dog with her head on its body and sticks it to her locker, which angers her. He's reprimanded by Mr. Ratburn for his bullying, and is told that he has to write a letter to Sue Ellen apologizing to her.
However, the letter Arthur writes is extremely passive-aggressive, and gaslights her for not being able to take a joke. Because of this, Buster, Francine, and Muffy stop talking to Arthur. (Though Buster does a bad job at it.)
Arthur still thinks that Sue Ellen overreacted, so he photoshops a dog's head on Sue Ellen's body and emails it to her, which makes her not only get rid of the coat, but ask to change classes so she doesn't have to deal with Arthur anymore.
It's only hearing this news and Arthur seeing the coat in the school's donation boxes does he realize what he did and genuinely apologizes, wearing the coat as a gesture of goodwill.
Bruh...
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I often wonder if we are growing as a people... or in fact, regressing.