Dylan whisks Kelly away to Cabo San Lucas, Mexico for the day. He buys her a hollow statue so that he can smuggle drugs back into the U.S. Kelly rejects Dylan and decides to focus on her relationship with Matt. Dylan promptly takes Gina to Mexico, and again smuggles heroin in a statue. When the statue ends up locked inside the boutique after hours, Dylan seduces Gina to get it back. Sonia and her boyfriend spend the night at Donna's store. One of Sonia's friends pulls a knife on her and warns her to stay away from her man. The store is robbed, and everyone believes that Sonia committed the crime to acquire enough money to escape the gang. She later reveals that she endured a beating to keep her friends from robbing the store, and a security guard actually committed the crime. Sonia thanks Donna for helping her get out of the gang. Steve mistakenly pledges $1000 per hour for an AIDS dance-a-thon at the club; he wanted to donate a total of one thousand dollars. He tries to keep his costs down by sponsoring Muntz and his wife, only to find that they have been working with a personal trainer. The couple wins the contest, but The Beat ends up making money when Steve's generosity attracts new advertisers. Noah accosts Gina for getting Donna the wrong birthday cake. Gina explodes in anger and reveals her bitterness about living in Donna's shadow.
As the Christmas holiday approaches, Noah is readying two big events: a dance marathon to benefit AIDS research and the celebration of Donna's birthday. Meanwhile, Kelly is surprised--and Matt distinctly unhappy--when Dylan whisks his former love over the border to have a gourmet breakfast in Mexico. Matt and Kelly both lack information that would be useful, Matt that Kelly deflected Dylan's clear romantic intentions, and Kelly that Dylan actually bought a large amount of heroin and smuggled it back into the U.S. While Dylan is able to use Gina Kincaid's attraction to him to get his drugs back after they are briefly locked inside Donna and Kelly's store, Gina is completely disgusted by his drug use and hates herself for sleeping with him. Gina's day isn't any better around those margins: Noah assigns her to order a special vanilla cake for Donna's party, then gets angry because the store made a chocolate cake and Donna is allergic to that. Furious that he blamed her for not knowing something that obscure and didn't seem mad that the order was bungled, Gina screams that she doesn't exist to be Donna's fucking servant, and when a hurt Donna says she didn't know Gina felt that way, Gina pours on the bitter sarcasm and says it's been wonderful living off the charitable crumbs that the wealthy Martins have seen fit to toss to her. At night's end, Donna and Noah do enjoy a slow dance to celebrate her birthday.
Donna earlier faced a crisis involving Sonia, the gang girl who showed up seeking to make amends after her cohorts trashed some of the store's fashions. A series of break-ins around the promenade has a security guard named Stuart looking for suspects and everyone but Donna convinced Sonia is behind the crimes. Eventually, Sonia finds out Stuart committed the robberies himself and Donna turns the information over to the police. Sonia then tells Donna she completed a "jump out" where the other gang members beat her savagely but let her leave the gang alive afterwards, and gives Donna a huge hug for being the only person who believed in her.
Steve decides that he should put the revamped "Beverly Beat" up as a sponsor for the AIDS benefit, but mistakenly pledges a tally of $1,000 PER HOUR instead of a flat rate. He then comes up with a brainstorm: he'll ask his portly former frat brother Muntz to dance with his wife! Alas, the Muntzes have become fit and strong via dieting and daily workouts, and Steve quickly sees the financial future of his paper being torn asunder. But Janet later comes to him with kisses and praise, both of which surprise him, and lets him know that the other sponsors were so overwhelmed by his generosity that they bought massive amounts of advertising and the paper's financial footing is now sound for the foreseeable future.
And for a new other notes: Matt charms Kelly with cheap local Mexican food, and the Brian Setzer Orchestra plays at the benefit.