Dharma and Greg are haunted by a prankster spirit living in a newly discovered hidden closet. It turns out that an old lady collects dolls. Meanwhile Larry shows Edward his skills of building furniture.

Dharma discovers Greg is really the only man for her when she agrees to attend a dance with a nerdy high school kid, but meets with some serious competition from the younger crowd. Meanwhile, Larry sings his "You guys are okay" song to Edward and Kitty, causing Kitty to fall and hurt herself; this prompts Kitty to sue Larry after she is embarrassed by her donut-cushion in front of the mayor. Larry represents himself, while Pete arbitrates.