Here's my take: Fred just wanted to throw a macaroni party but the tater haters kept on raiding all of them and driving Fred out. He used the beds to not only sleep, but to escape the nightmares he was enduring because of the tater haters that want him dead. Meanwhile, the players come in to clean out the tater haters. They become overwhelmed by the massive amount of tater haters so they have to sleep and ascend to the future macaroni parties. They do this until the third and last macaroni party so far. After sleeping out the third one, they find themselves at Fred's funeral, where they discover that the tater haters finally killed Fred. They were even kind enough to attend his funeral, though they still wanted the players dead as well.

I think the next one might have the players attempt to bring back Fred somehow by ascending via sleep. Maybe the players have to throw their own macaroni party so hardcore that the tater haters won't be able to stand a chance. Do the beds play a bigger role than we think? Are we in a repeating nightmare? What do you guys think is going on?

EDIT: I think the face we keep seeing around the map might be the face of a tater hater who's been trying to take over the macaroni parties. Or maybe it's the person that died, meaning that Fred is still out there somewhere.

I hope Annoying Orange makes a cameo in the fourth installment.