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Christy tells the story of her encounter with Larry, or "Peanut", that got awkward when he called her his favorite person's name. Pinky brings the story to Lola, who then believes Johnny cheated on her with his best friend.
Johnny, confronted by Lola about this, tries to sort things out with her. He ends up making things more complicated, having Larry realize and confess his feelings for him and finding out that Lola's been with Gord behind his back again. Seeing how Larry loves him more than she does, he realizes he might have feelings for his best friend too— and if Lola is already convinced that he cheated, should he just do it?
Gord especially wants revenge on Johnny after he was caught with Lola again. Finding out about Christy's rumor, he creates Derby-approved plan to humiliate The Greasers. When Vance confronts him, Gord seduces him to avoid consequences. However, his reluctant accomplice Parker wished he could have finally faced a consequence for what he had coming as an awful friend. Finding this out, Gord, feeling betrayed by him, wants Parker out of The Preps. Parker thinks he wants to leave too, but it isn't that easy...