Heather and Dari literally turn trash into treasure, making functional trivets out of garbage scraps. The judges go for Dari's love theme and put her in the lead.

The sexy second round of competition requires our contestants to turn boring men's underwear into ladies' lingerie, and Heather makes an unprecedented comeback by running with a football theme sure to turn on her boyfriend.

Heather squeaks into the third round, only to be annihilated by the Craft Lady of Steel and her rockin' New Year's Eve napkin rings.

Sandy and Kyrst face off in a battle to create wind chimes from kitchen utensils, and Sandy pulls ahead with a towering two-tiered confection.

In the second round, the contenders embellish jeans with only fabric scraps and fusible interfacing. Kyrst loses the contest--and our host loses his pants.

But then poor Sandy gets smacked down by the Craft Lady of Steel in the bonus round's Hot-Glue Watch Challenge, when the judges flip over the Craft Lady's sophisticated design.

In the first round of competition, Sam and Liana build fancy, tiered cakes out of nothing but snacks and store-bought icing. Although Liana gets points for height, Sam takes the lead based on beauty and edibility.

The next round begins with some falling foliage--the main ingredient in the Leaf Card Challenge--and Sam's incredible Christmas card scores an easy win over Liana's single-leafed Halloween horror.

But Sam is pummeled in the bonus round when the Craft Lady of Steel transforms an old teddy bear into a fashionable scarf ready for the runway.

Two crafters duel it out in a tile trial--but are they skilled enough to take on the Craft Lady of Steel?