Balki agrees to babysit their new neighbor's daughter Tess and lets her do whatever she wants. She ends up terrorizing the apartment which disturbs Larry who is trying to write a possible front-page story for a city council expose. She also disrupts the staff at the Chronicle.

Larry and Balki buy a race horse and when they race him, he comes in last. They later discover that he has an incurable disease. But Balki takes the horse back to the apartment and tries a Myposian potion to cure him.