Rory's application for Harvard arrives, plunging Rory, Lorelai and Emily into a frenzy; a Chilton seminar on college applications only adds to Rory's anxiety and sends Paris into a tizzy; Taylor steamrolls Luke into opening a soda shop next to the diner; Lane places an ad in the paper for a band and finds a musical soulmate; Lorelai and Rory have dinner with a Harvard alumni and his family which may assure her chances of acceptance; Dean has a talk with Rory about their future after she goes to Harvard.

Lorelai's grandmother arrives in Hartford unexpectedly on Richard's birthday and announces that she's moving back, throwing Emily into a tizzy until she follows Lorelai's advice on how to manage her mother-in-law; Rory declares war on Francie after she pulls a runaround on Paris with the Student Council; Paris finds herself in love after spending Christmas vacation with Jamie's family; after Rory and Dean bump into each other a few times, they decide to be friends again; Jess initially declines Rory's offer to attend the Stars Hollow High Winter Carnival, but changes his mind after they run into Dean and his sister Clara, who invites Rory to join them; Jess gets Dean alone at the carnival and lets him know that he's wise to his plans to get Rory back.

Offers of dates ensue when Lorelai and Sookie attend a seminar on operating an inn and run into two handsome men -- an old friend of Sookie's and his business partner; Lorelai unsuccessfully resists being deposed when her mother is sued by a former maid for wrongful termination; after Rory and Francie butt heads at the student council meeting, Francie proposes a truce and then immediately lies to Paris that Rory is trying to undermine her; Paris is crushed that her best friend has betrayed her and lashes out at her during their fencing class, leaving Rory ostracized by the rest of the student body.