They explain to Holland that she is getting sting'd, and she needs to tell them why she is doing all this insane stuff like poisoning Lily and the business with the scarf. "Are you in love with Rufus? They say psychiatrists are the craziest ones!" Blair says, and Rufus storms up right then and demands, demands, demands to know what the hell is going on, and you have to drink every time somebody in this episode goes. "Would you like to tell him, or should I?" So even without stupid Jenny's murderous non-help, they finally get Holland to admit that she owed Will some favors... And if you are thinking it's going to get more explained, you are wrong. That is the only explanation you get:
Holland Kemble is possibly crazy, but definitely would write prescriptions for fake medications (Which how you do even do that, get a pharmacy to fill a mislabeled prescription? How does that come down to the prescribing physician anyway? Isn't there a third person, a pharmacist, in this scenario? Fuck it) and definitely also would come upstairs to Lily Bass's apartment and lie to her face about having slept with the wussiest wuss of all wuss. What are her reasons? Craziness, possibly, and her own marriage going up in smoke, but also... she owes Will a favor. AND THAT'S THE ENTIRE ANSWER TO SEASON THREE.
"Where was Lily all summer? What Happened in Santorini? Is CeCe okay, or is her cancer real this time? Why was Will so weird before, in the Europe? I can't stop having sex with Carter Baizen! My mom gets headaches! I quit Brown and moved out! What's the deal with that letter that Maureen found? I can't stop having sex with married Congressmen! Why does Lily lie about everything, even when she doesn't need to do so? Why did Serena steal a horse one time?"
Well, I'll tell you, the answer to all of these questions and more is that Dr. Holland Kemble... owes Dr. William van der Woodsen a favor.
Jenny has busted a move over to Will to get him out of there before that whole house of cards comes falling down, because there's still a chance she can get Lily poisoned to death. Will assumes she's being accusatory and acts all cagey, but she peels back a little bit of her human face to reveal her secret dragon face and she's like, "No, I totally get it! I support your plan of poisoning your ex-wife! I just want to move back to Brooklyn and deal drugs and dress like the bride of Satan. Maybe start a band. Get a little shivery dog. Drink Natty Lite and give handjobs to freshmen. Art parties in Bushwick. Live life, like I used to. Sew some clothes. See what scabies are all about."