Season 3, Episode 45: Mermaid Man and Barnacle Boy IV
In this episode, its a normal day at the Krusty Krab until Spongebob's idols, Mermaid Man and Barnacle Boy, walk in. Spongebob gets overly excited and smashes through a steel wall to get an autograph. The two heroes run away is annoyance, but don't realize that Mermaid Man dropped his utility belt on the way out. Spongebob tries to give it back but they drive off before he can. He decides to wear it until after work and plays with it. While in the kitchen, he shrinks the utensils and makes tiny Krabby Patties for the cockroaches there. Squidward walks in and sees Mermaid Man's belt. He assumes Spongebob stole it and wants to call Mermaid Man to give it back. Spongebob doesn't want him to do that because he fears he'll kick him out of his fan club.
Spongebob panics and shrinks Squidward. He doesn't know what to do so he goes to Patrick. Patrick suggests he turn the "M" upside down to make a "W". M for mini or W for Wumbo. Spongebob is convinced this will work so he tests it and it still shrinks everything. People walk by and Spongebob continues to shrink everything accidentally, until all of the Bikini Bottom is tiny. The citizens begin to climb inside of Spongebob and beat him up. The town gets tired and upset that all of the buildings in the Bikini Bottom is to large, so Spongebob shrinks it all down along with himself. Plankton returns from a vacation and is now taller than everything.