In January 2011, the twelfth episode of the new My Little Pony cartoon was released. Among other things, it featured a light, peppy song about baking cupcakes.
This would lead to the creation of a highly gruesome piece of fanfiction that would become one of the most notorious in the burgeoning fandom, shaping it for months to come.
Exactly when "Cupcakes" was first published is unclear, though it is known it had to happen after the release of "Call of the Cutie" on January 7 and at some point before the final edit date on the original Gdoc, in late February. It is a badfic in the My Little Pony: Friendship Is Magic canon.
Pinkie Pie sets up a date with Rainbow Dash to bake cupcakes. When Rainbow taste-tests one of the cupcakes, it's revealed that it's drugged and RD collapses. When she wakes up, she finds herself in a dark room adorned with pony flesh. Pinkie then jumps into the picture and is wearing a dress made of unicorn horns, pegasus wings, and cutie marks. She reveals her secret ingredient is pony folk and says that Dash's number came up; it makes no sense due to lack of reason.
Despite her friend's teary protests, Pinkie proceeds to cut off RD's cutie mark and chop off her wings (Say Dash, why do they call it a hacksaw? Hacking is what I was doing with the knife, and this is a saw. I just don't get it!). RD passes out a few times, but Pinkie gives her several adrenaline shots to keep her awake. Things quickly become graphic when Pinkie tastes RD's flesh from her leg, brutally electrocutes her, and then dissects her chest. She then toys with the organs, making jokes as she uses them as daily necessities. Eventually, RD dies after Pinkie Pie rips her heart out and slits her throat.
In the end, Pinkie is left unsatisfied and feels sad that her friend had to die. With a sick epiphany, she decides to stuff RD's dead body and preserve her so that she wouldn't have to say goodbye. She puts the cupcakes on hold, saying she has a "friend" to make. (Note: there are two different endings. In the error-free ending, the friend she makes is a stuffed RD; in the original, Silver Spoon is next on the list and Pinkie lets her accomplice Applebloom—who had been teased by Silver Spoon before—kill her)
Though the content of "Cupcakes" is fairly gruesome, it's not very noteworthy besides, lacking a coherent storyline or any particularly hilarious grammar errors (which is not to say grammar errors don't exist in the original, they're just not very funny ones). What makes it infamous, paradoxically, is its infamy.
It was released while the fandom was still centered on 4chan, and disseminated from there. For a fandom which had not experienced much or any serious horror or dark fiction yet, it was horrifying—and so despite its generally poor writing quality, "Cupcakes" became a legend.
Within a month of its first appearance in early February, its fans had cleaned up the writing and released no fewer than fifteen spinoff endings, and the line of "Cupcakes"-inspired fics stretches in a bloody and disturbing swathe down the fandom to the present day.
The original and edited "Cupcakes" stories, as well as a slew of spinoff material, can be accessed from here. The original story is EXTREMELY Not Work Safe as well as Not Mind Safe, and most of the spinoffs are as well. Proceed with caution.