In Nestor Stephen replies to his students' clamoring for "a story, sir. . . . A ghoststory" by saying "After" (i.e., when the lesson is completed). He never gives them the story, but the riddle that he tells them instead does release a bit of the terrible emotional energy that he connects with ghosts, by imagining himself as a fox (he is, after all, a dogsbody) that has buried its grandmother.
In Telemachus Stephen recalls (twice) that he was visited "in a dream" by the ghost of his dead mother, and her specter will return to terrify him at a climactic moment in Circe. He gives the boys a miniscule window onto his terror by posing an unanswerable riddle and then, "his throat itching," supplying the answer: "The fox burying his grandmother under a hollybush."
Thornton notes (citing Joseph Prescott in MLQ 13) that the model for his riddle can be found in P. W. Joyce's English as We Speak It in Ireland, where the answer to a very similar unanswerable riddle is "The fox burying his mother under a holly tree." The riddle clearly functions as an expression of the guilt that Stephen feels about having "killed" his mother, though he masks it slightly by changing her into a grandmother. Later in Nestor he thinks guiltily of himself as a killer: "A poor soul gone to heaven: and on a heath beneath winking stars a fox, red reek of rapine in his fur, with merciless bright eyes scraped in the earth, listened, scraped up the earth, listened, scraped and scraped." In Proteus he sees a dog furiously scraping in the sand and thinks, "Something he buried there, his grandmother."
For sources of the image of a fox scraping at a grave, Thornton cites a number of passages, including two from John Webster: The White Devil ("But keep the wolf far thence, that's foe to men, / For with his nails he'll dig them up again") and The Duchess of Malfi ("The wolf shall find her grave, and scrape it up, / Not to devour the corpse, but to discover / The horrid murder").
Eventually, Stephen will tell "A ghoststory," but not to the boys. In Scylla and Charybdis his talk on Shakespeare centers on the figure of Hamlet's father's ghost: "He will have it that Hamlet is a ghoststory . . . Like the fat boy in Pickwick he wants to make our flesh creep."