A treat dispensing pet toy comprises a hub assembly having first and second hubs and an axle interconnecting the hubs. A barrel is mounted over the axle and is disposed between the hubs. The barrel has an interior chamber to hold treats. A treat dispensing opening is formed on the barrel and communicates with the interior chamber. When the pet toy is contacted with sufficient force, the hub assembly and barrel independently rotate thereby establishing a rotational differential. Treats fall through or are otherwise ejected from the opening in the barrel. According to a method of dispensing treats, the barrel and hub assembly independently rotate at different rotational speeds to affect the rate of dispensing treats.