Dan is just literally talking to Serena's boobs now. Which, as long as they're going to the effort of shaking hands and saying How Do You Do like that all the time, I'm sure they appreciate. He explains to her the limits and the outline and the general shape of this latest total betrayal of everything he thought his life was based on, his values and his pristine perfect future of future perfection that she has once again irreparably damaged, and as usual it's so solipsistic and sulky-teen-boy that Serena loses track about five seconds in. They agree to compartmentalize everything about Lily/Rufus, and keep it all in separate boxes. Which is the opposite of how S... Yeah, see? "Things don't just go in boxes. They go all together." That's like Serena's entire life mission right there. Everything in one big box, no secrets and no trouble and nobody getting mad. Just a good time had by all. Dan laughs and says that this particular thing is going in a box with a really tight lid that you bury deep in a hole at the bottom of the ocean, just like his gay homosexual attraction to Nate Archibald. They immediately come upon Lily and Rufus talking about nothing special and making out, and Lily leaves them with Rufus so she can go do some paperwork, just like people do at charity opera galas.
B's phone rings and Harold reminds her to turn it off, citing "the Kevin Kline incident." This whole script is so elliptical and full of mysteries you'll never know, I like to imagine that they're all one thing: that somehow the Nelly Yuki Project involves Kevin Kline and two transsexual prostitutes. Otherwise, it's just a lazy script that relies on the same joke at least once in every act, and that would be sad. The phone call is Fake Queller, who is calling -- as one does -- to apologize on behalf of Miss Carr for giving Blair an honest B, and to confirm that so long as the rest of B's grades are up to the usual high standard, she'll still end up with an A. "It was sweet of Miss Carr to be so concerned, she's a good asset to the school. I think she cares about her students, she cares about their futures," says Queller. Yeah, she cares about boning their sulky teenage boyfriends, dude. Blair excuses herself to go fix things with Miss Carr, and Harold and Roman say French talk to each other.