Mike walks in on Simon and Carly. Simon is nude. Nothing was going on, but Simon leads Mike to believe there was. Carly explains to Mike what happened with the paint getting spilled. Katie calls Mike and says the thermometer is ready to make a baby, Mike hurries home. Carly is mad at Simon for making her look bad. She and Simon argue, she says that this is really all about Katie, he's using her to try and make Katie jealous. She leaves, even though the meeting with the buyers is coming up. Katie is in a negligee, she opens the door thinking that it's Mike, but it's Carly wanting to talk about what Mike saw.
Katie doesn't look happy at all when Carly tells her that Simon bought her the Gorgio dress she has on and that Simon was naked when Mike walked in. About that time, Mike comes home. Carly tries to explain to him that nothing was going on. After she leaves, Katie says something must be going on for Carly to bother coming over to try and deny it, Katie is too concerned about the whole Carly, Simon deal. She's out of the mood to make love to Mike. Simon finds Carly at Java, he tells her he won't disrobe in front of her again unless she invites him to.
Margo and Tom have some alone time, she tells him how worried she is about Maddie, she feels guilty for kicking Maddie out of their house, and sees how much Maddie needs Casey now. Tom gives her a shoulder rub and assures her that they will catch Louis, and that she is not to blame for what's going on with Maddie. They hug and get romantic.
Gwen is upset when she finds out Jade came to the lake with Luke. Will follows her as she stomps off. Luke walks up to Kevin and his friends, they give him the cold shoulder. The Slasher watches from the bushes as the kids have a blast in the water and as Gwen and Will argue along the shore. Casey lies in the sand, thinking about him and Maddie until his friends come along, they all start playing with water guns. Meanwhile, Gwen keeps trying to get away from Will as he follows her, trying to talk, and the Slasher watches on.
On the shore, Luke talks to Kevin as they go for a walk. Gwen runs up and starts talking to Casey, and Will turns and walks away. Luke and Kevin go in the cabin. Luke comes out to Kevin that he is gay. Kevin freaks out, takes off and leaves Luke alone. Luke catches up with him and Kevin agrees to talk to Luke without anyone else hearing, but he tells Luke that he's a freak. Will is walking alone in the woods when Jade shows up. He tells her to go away. She says she didn't come there for him, she came for Luke, to support him in coming out. She says she will stay out of Will's way.
At the cabin, Casey tells Gwen he thinks it's a good idea Will showed up. Gwen doesn't want to talk about Will. Casey, Gwen and their dorky friend are about to leave the cabin to go play touch football with the rest of the kids, but the dorky kid has to go back to the cabin to get his inhaler. The Slasher attacks him. At the football game, Will is trying to get Gwen to be on his team, she won't have anything to do with him, takes off, Casey behind her. Zack and Allison decide to leave and go back to the cabin to make out. They discover the dorky kid dead, his throat slashed. No one knows that Maddie is at the lake, she watches from behind a tree and Casey takes Gwen's hand.