Ed walks Kate home. Kate thinks that Ed is being a gentleman, when we all know he's hoping for some nookie. Kate thanks Ed for dinner. Ed thanks her for inviting him in. Look at Ed being assertive. Kate does invite him in. Once inside, Ed starts to make a fire. No, literally, with firewood and stuff. Kate offers him matches, but Ed says he doesn't need them. I think Ed ran a marathon carrying the firewood, because he's breathing awfully heavy here. Ed finally takes the matches, and then they start making out. Ed says that the kissing would be more romantic in front of a blazing fire, but then he tosses the matches aside and continues making out. Kate stops him and asks Ed if he kind of likes her. Ed confirms that she's not imagining things, and tries to continue kissing her. Kate says she has to tell him something: "That money at work? I stole it." Insert the sound of Ed's erection wilting.
Ed sits up and asks Kate what she means about stealing the money. Kate apologizes for not telling him the truth at first. Ed realizes that he just made out with an embezzler. Kate says that it's not what he thinks. There was a policy holder who needed a liver transplant. Ed is still having trouble with this. Kate explains that the guy would have died without the transplant. Ed suggests that she turn herself in. Kate doesn't want to. Ed says that he never would have helped her get her job back if he knew that she really did take the money. Now, Ed feels used. Kate apologizes again. Ed asks if she's going to turn herself in. Kate says that she can't. Ed grabs his coat and says that he has to leave. He takes one last look at Kate and then walks out.
Carol sneaks up on Nancy's classroom and stands in the doorway, watching. Nancy is urging Mark to say something painful. Finally, Mark admits that his sister is married to a homosexual. Mark adds, "She's a beard." Nancy says that it was good that he admitted it, and leads the other students in applause. Seriously, in real life, five minutes after class, someone would yell out, "Your sister's a beard!" at Mark in the hallway, and he would cry. And then he would tell his parents, and they would sue both Nancy and the school. Nancy notices Carol standing there, and tells the kids to keep talking. In the hallway, Carol asks what's going on. Nancy thinks that the talking helped. Carol reminds Nancy that it's an American History class. Nancy says that they got a little sidetracked, and starts to head back into the room. Carol yanks Nancy by the arm, and says that there is some concern among the faculty that Nancy isn't sticking to the lesson plan. Nancy immediately apologizes. Carol tells her that it's okay, and Nancy promises to stick to the lesson plan from now on.