Juliet is like, "Having gotten dumped by you eleven times, I must admit I was surprised that you want to take me on a coffee date. But then I remembered you are Nate Archibald, and it's entirely possible that you forgot you dumped me, so I figured what the heck." Nate thinks that Juliet broke up with him, which was another conversation where the conversation never happened: She called to apologize for using him in Operation Smile and I guess break up with him, but before she could say either of those things he started screaming about what a whore she was. Which was awesome, don't get me wrong, but Nate's life is so naturally confusing that I get nervous when shit happens like this.
The long and the short is that Juliet comes clean about her embarrassing horrible life, like so: "I didn't want you to see where I really live! My actual apartment is a studio on 126th Street! My cousin pays for things and I shop at the mall and do my own hair and choose my own blah outfits! It's the saddest story ever told! It's like Rent. Except my billionaire cousin pays that."
Nate's response is, of course, "I can't believe I never told you about the year I spent as a homeless rent boy! Man, egg on my face. You think Morningside Heights is bad? Try a loft in DUMBO. So we're squatters, that's cool. Hey, do you want to be my girlfriend and go to the ballet with me?" Of course Juliet wants to go to the ballet with Nate. She's like, "Thanks for undumping me. Wait, I dumped you this time? Well, good on me."
Ah, but the whole thing is that this coffee date was a trap! A very Abraharchibald kind of plan whereby Nate takes Juliet to coffee so that Vanessa can break into her apartment -- having found it by triangulating Juliet's foursquare account, which is just mindblowing in many ways, some of them good -- using her old cat-burglar skills. So while Nate is forgetting this entire plan and accidentally becoming Juliet's boyfriend again, Vanessa is going through her belongings and pissing in the couch. Ignoring Nate's urgent message to stop the B&E in progress and act like a goddamn human being for once, she goes full jerkoff and finds the pictures of Serena and Colin chastely XOXO in a tree. Her eyes get wide like any of this matters, and she's like, "Finally! A storyline in which I am not a patsy but an actual active participant!" And God's all, "Not so fast, Abrams."