I've searched for an answer but came up empty-handed. Could someone please help with the following lines of dialogue?

He made a joke to ease the tension. “What about ugly?” Seeing her confusion, he explained, “You said the good and the bad. There was a movie, ‘The Good, the Bad, and’—”

“The ugly,” she finished with a grin.

The problem is with the last line. Should the ugly have single quotes around it? Technically speaking, it's part of the title. And should ugly be capitalized for the same reason?

I have to stop writing myself into corners! Thanks for any suggestions.