Nate and Serena decide to explore the boundaries of their friendship. Blair suspects that Chuck is having problems forgetting about the woman he saw at his father's grave. Jenny agrees to accompany Damien to a State Dinner but is unaware that he needs her help with a drug exchange. Vanessa and Dan attempt to move past the awkwardness of Dan's confession of love. Rufus returns from a ski trip and tries his best to avoid Lily.

Despite being grounded, Jenny continues to see Damien who tells Jenny that he wants to have sex with her. Lily tells Rufus the big secret she has been keeping from him even though she knows it's a huge risk. Dan and Vanessa explore a new stage of their friendship. Chuck is forced to make an extremely difficult decision about his hotel.