Squidward created the character of the "Hash-Slinging Slasher" to scare SpongeBob as a form of entertainment during the 24-hour night shift.
According to Squidward's story, the Hash-Slinging Slasher was a former fry cook who worked at the Krusty Krab before SpongeBob. The Slasher one day severed one of his hands by mistake while cutting Krabby Patty meat, and replaced it with a rusty spatula. Later, he was fatally run over by a bus and "fired" at his funeral. Out of vengeance, his ghost returns to the restaurant every Tuesday night via the bus that killed him and "gets" unsuspecting victims. However, his presence is announced by (in sequential order) flickering lights, a phone call with nobody on the sending line, and the arrival of the bus that killed him, stopping just outside the Krusty Krab.
Squidward later confessed that he fabricated the story in response to SpongeBob's almost melodramatic screams of terror. Later that night, however, it seemed that the events of his story were coming true. Eventually, it was revealed that the Hash Slinging Slasher, or what they thought was him, actually came to apply for a job at the Krusty Krab. He was also revealed to be the cause of the latter two "signs" signalling the Hash-Slinging Slasher's arrival, with Nosferatu causing the first one.
- The Hash Slinging Slasher's name is often mispronounced by SpongeBob and Squidward.
- The Hash-Slinging Slasher is an parody of slasher film villains such as Freddy Krueger or Jason Voorhees.