A power surge creates a mainframe glitch and, just as it was created, jPod is going to be disbanded.
The Podsters contemplate their next move. John Doe (TORRANCE COOMBS) aspires to work on Knugle, a game featuring Swedish furniture, while Bree (STEPH SONG) is drawn to Girlfighter. Kaitlin (EMILIE ULLERUP) considers Baby Cloris, a game based on her favorite toy doll, and Cowboy (BEN AYRES) is wooed by rival game company Awesome Arts. Ethan (DAVID KOPP) is offered a posting in San Francisco and the mysterious "Babette" calls to tell him she will miss him.
The commune is being fumigated so Carol (SHERRY MILLER) and the lesbians converge on the Jarlewski home. Since Carol left him, Jim (ALAN THICKE) hasn't been coping, but he can't take the invasion of the "coochiemonsters" and he moves in with Ethan.
The Podsters are exasperated by eerily familiar new colleagues. Bree's bitchy co-workers fight more than the game avatars and everyone in Knugle is goreophobic. The Baby Cloris staff only brag about old jobs and talk about crash diets and ex-boyfriends. With nothing to lose, the Podsters decide to pull one last prank by hacking a montage of their finest gore sequences into the Neotronic Arts board meeting.
With a little coaching from Kam Fong (RAUGI YU) Jim has a reawakening and tells Carol he'll do whatever it takes to win her back.
Back at jPod, Ethan and Kaitlin talk about what they might do – together, if they get sacked, and then, they kiss.
But Cowboy has been working with Babette -- to find her a "body." Babette isn't human, she's artificial intelligence!
Cowboy programs Babette into the curious hugging contraption and it goes berserk. Kaitlin is crushed in the hug machine and falls into a coma.