To become the greatest band of all time, two slackers, wannabe-rockers set out on a quest to steal a legendary guitar pick that gives its holders incredible guitar skills, from a maximum security Rock and Roll museum.
This is the story of a friendship that changes the course of rock history forever, of the fateful collision of minds between JB and KG that led to the creation of the precedent-shattering band Tenacious D, and of the two heroes' quest to find the fabled Guitar Pick Of Destiny...—Anonymous
As a young man, Jack Black leaves his religious family and oppressive town (Kickapoo, MO) for Hollywood on a quest to form the world's most awesome rock band. There he meets acoustic guitarist Kyle Gass, who is performing on the street, and begins worshipping him as a rock god because of his skills and attitude. Kyle feeds Jack's fantasy by pretending to be famous with a self-named band ("The Kyle Gass Project"), and exploits him to do work such as cleaning his apartment and buying him weed with the promise of an audition for his fictitious band. After Jack learns Kyle is actually unemployed and living off his parents, the two become equal, and Kyle apologizes to Jack by giving him a brand-new guitar. They create their own band: Tenacious D, named for birthmarks found on their behinds. (Jack has a birthmark which says: "Tenac", and Kyle has a mark which reads: "ious D".)
Soon Jack and Kyle learn the deepest secret of rock: all the rock legends used the same guitar pick, The Pick of Destiny, which has "supranatural" powers. It was created by a dark wizard from a piece of Satan's tooth, as a gift to a blacksmith who saved his life from the great demon. The pick gives its holder unnatural abilities with stringed instruments. Infatuated by the prospect of becoming the next great rock star, Jack immediately sets Tenacious D on a quest to steal the Pick of Destiny from a rock history museum. Along the way, the band briefly splits up when, invited by some coeds to perform at a party, Kyle decides that sex comes first in "sex, drugs and rock 'n' roll", while Jack wants to stick to the mission at hand. The duo is reunited after Kyle's solo performance at the party ends up in failure and Jack has a mushroom-induced hallucinogen experience in which he encounters the Sasquatch and cavorts with him through the forest (actually risking his life several times).
The two manage to steal the Pick of Destiny due to incompetent (as they are high on marijuana) security at the rock museum. Armed with this supernatural pick, they plan to use the winnings from a local bar's talent contest to pay their rent, but before they can go on stage, greed overcomes them, and they fight over the pick, accidentally snapping it in half. After a pep-talk from the bar's owner, they decide they are good enough to go onto the contest without the pick, not knowing that the owner is Satan in human form, looking for his missing tooth piece. Coming back outside (deciding they can both use half of the pick), they are confronted by Satan, who is "made whole" when he places the Pick of Destiny back on his broken tooth, giving him the ability to use his supernatural powers on Earth. He threatens to take Tenacious D back to Hell.
To save their lives, Tenacious D challenge Satan to a "rock-off", which he is forced to accept according to the "Demon Code." The terms of the challenge are that if Tenacious D wins, Satan must return to hell and pay their rent, while if Satan wins, he gets to take Kyle back with him. Ultimately, they lose (Kyle sings, "That was a masterpiece! / He rocks too hard because he's not a mortal man."), and Satan attempts to shoot Kyle with a bolt of energy. Jack jumps in the way, and the bolt bounces off his guitar, blowing off a piece of Satan's horn. Jack is able to exploit Satan's "incompleteness" in order to banish him with a magical incantation.
The two turn Satan's horn into the "Bong of Destiny" and the movie closes with the two smoking from it as they write new songs.