This is the first of 18 episodes written by Jacob Krinkle in a drug fueled frenzy, and the title and premise reflects the copious amounts of Opiods he had been taking while constantly playing a tape-loop of Samuel Taylor Coolridge's Kubla Khan. The production was hampered by Swazenegger's broken nose which is why many shots of him either having him pulling pensively on his nose or framed behind a well positioned tree branch.
At DutchDillonCon '95 Krinkle announced in a Q&A session that this was one of his favorite episodes of the last 15 seasons, explaining that at the time he was too drugged up to realize, but subconsciously he had included many allusions to Homer's Illiad and used the repeating motif of atomic imagery.
The Superterrific Lucky Gold Emperor Vietmanese Restraunt doubled as the Mongolian Palace in this episode.
A mysterious old woman drops her purse outside of Dillon's favorite doughnut shop, but before he can return it to her she is hit by a bus and subsequently mangled by a collapsing crane, and then urinated on by a dog. Distraught Dillon can't sleep for three nights until his old buddy Dutch brings him a doughnut and suggests that openning the old woman's purse will provide some closure to the events.
They find a mysterious map and amulet that seems to direct to a mound somewhere in the Mongol steppeland. Without hesitation D&D make their way to Ulan Batoor where all the locals seem to fear the amulet, and some odd iron clad militia constantly fires flaming arrows at D&D. Finally they hatch a plan to create a giant iron armor suite and leave it outside of the Khan's palace, which he assumes is a gift... little does he know that Dutch and Dillon are inside...or are they?
Rather while the iron clad militia was busy hauling in a seventeen tonne suite of armor, D&D snuck into the palace through the back kitchen door. Some impressive battles using atom-shaped weapons eventually leads them to the "Chamber of Eternal Knowledge" where the amulet causes a chain reaction and Dutch becomes enlightened and at one with the spirit of the third Dhalai Lhama -- suddenly the old woman emerges and explains to Dillon that it was all a test to see if he was worthy.
He subsequently wakes up on the road out front of his favorite doughnut shop wondering if it was all a dream, the last words he recites are "In Xanadu did I do, what Dillon thought Xanu did do?"