Back in Loretta's living room, Barney snarls about Grant, the child he cast to play Tyler. Ted thinks he seems pretty good, but when Grant returns to the living room with a bag of chips, Barney demonstrates that the kid doesn't even respond to his character's name, by calling it over and over again. Um, Barney, my often kids don't respond to their real names, unless I'm calling them to eat or buy something. I'm just saying. Barney says, "Call me crazy, but I think child actors were better back in the '80s." Heh! And we cut to the next scene.

Lily and Marshall return from touring the house, and Lily remarks that Barney's room seems to be just how he left it. Marshall comments on the big Karate Kid poster over his bed. Barney smiles. "Karate Kid's a great movie. It's the story of a hopeful young karate enthusiast whose dreams and moxie take him all the way to the All Valley Karate Championships. Of course, sadly, he loses in the final round to that nerd kid. But he learns an important lesson about gracefully accepting defeat." Lily can't believe Barney roots for the mean, blond boy. Barney scoffs at her. "No, I root for the scrawny loser from New Jersey, who barely even knows karate." A beat... "When I watch The. Karate. Kid, I root for the karate kid: Johnny Lawrence from the Cobra Kai Dojo. Get your head out of your ass, Lily."

Meanwhile, "Betty" comes back in to set the table. Ted tells her he remembers seeing her perform at the Disorientation Theater, "in Bertolt Brecht's Die Heilige Johanna der Schlachthöfe last fall. You were a revelation!" He's in classic enthusiastic-yet-pretentious Ted mode, and Margaret's hooked. They chew the fat about Brecht's work, and Margaret tells Ted she's impressed by his theater knowledge. Ted says, "Lady Theater grabbed my heart early on, and she never let go." Well, did you ask her to marry you, Ted? It might be unconventional, but the heart wants what it wants. Ew. I just gave myself a major wiggins. Let's get back to our Ted, who tells Margaret about the plays he used to put on at Christmas with the other kids. But once we FLASHBACK, we see not a child, but a teen-age-y Ted lambasting his very young cousin, accusing him of "butchering" his words -- which are in a family play about Santa Claus, mind you. Teen Ted finally decides he'll have to write, direct and star in the thing, confiscating the boy's elf hat. I'm pretty sure Margaret didn't get the benefit of that flashback, because when we FLASH FORWARD to the present, she's still interested in him. He tells her that his secret dream was to become an actor, and it's never completely faded away, so she offers to give him some acting tips. They sit at the dining room table, while she starts out with her first rule and we jump to...