The boys and Peggy have in fact moved into Pete's office, and it's worth noting that Peggy and Pete seem to be working rather harmoniously as they discuss some account having to do with kids. Ken pulls Paul and Harry out to celebrate the latter's baby news, and Peggy tells Sal they should go in to Don with the Mohawk drawings. Sal points out that Dale isn't there, but Peggy replies, "Mr. Draper doesn't care." Heh. Sal heads out, but before Peggy can do the same, Pete sighs that he doesn't get the big deal about kids, and asks Peggy if she wants any. Peggy takes a moment and responds, "Eventually." Pete: "Exactly." Some kid in foster care: "Well, I'm so sorry my timing was so fricking inconvenient."
Sal and Peggy show the artwork and slogan to Don, who's unimpressed. He points out a child in the drawing, and suggests it be the focus. Peggy takes a rather defiant tone and tells him that sex sells, but Don is up to the challenge of showing for the 5,398th time why he's the boss as he informs her that people who say that think that a monkey could do their jobs, but that's not the case. He picks up the Valentine on this desk and tosses it on top of the drawing: "You are the product. You, feeling something -- that's what sells. Not them. Not sex." Peggy, however unwilling she was to start, has been listening raptly, and Svengali... I mean, "Don" concludes his Minute of Mentoring by adding, "They can't do what we do. And they hate us for it." After giving it a little thought, Peggy comes up with a slogan that satisfies her boss, and Sal doesn't need any further prompting to get the hell out of there.
Peggy discovers that the office she's already sharing is now home to the Xerox machine. Ha! No matter what rules and regulations she may have cited to Lois, Joan takes care of her girls. The trumpet of That's What You Get For Not Remembering Where You Come From plays jauntily.
Don is on the elevator when two douchebag guys get on and start talking grossly about some female co-worker of theirs, and don't stop when a woman gets on. Seeing her obvious discomfort, Don, in an oblique way of getting them to show some manners and respect in front of the woman, orders one of the dicks to take his hat off. Not knowing when a man means business, they gape slack-jawed, so Don removes the one man's hat for him. He doesn't shove it up the guy's ass, but then,there is a lady present.
At night, Betty's car dies on a dark road, and she flags down the next driver and asks her to stop at the Esso station and call for a tow truck.