"I understand, better than she ever did, the cutting power of eyes that look right past you."
A spilling of secrets from an unexpected source leads Karen's clique to put a cruel new twist in their plot against Penny.
Various girls spread the word about Karen's weekly popsicle parties, held in a different location each time and protected with a "vow of e-silence" prohibiting direct mention of the parties in online communication, so that "mostly cool people show up." Also, invitees aren't allowed to tell Penny. At one such party, Cyndi makes out in public with Daphne, but moments later flirts with Marshall (who brushes her off) in front of her. Daphne is hurt and takes off. (Stan makes a move on Cyndi instead.) As Omar, Samantha's ex-boyfriend, tries to flirt with Karen, Karen also has to contend with a drunken Helen hanging around annoying her...and letting slip that Aggie's not in fact gay, but has a crush on Marshall; it's Sara who's gay.
In panic, Karen gathers as many members of her clique as she can for an emergency meeting. Although her primary concern is that Aggie may steal Marshall, Meg assures her it's nothing to worry about as long as she keeps him on a leash by withholding sex—or continuing to have sex with him, as turns out to have been the case. Charlotte, who has a more private crush on Marshall herself, proclaims that he'd never cheat. She's also, as a fundamentalist, shocked and disgusted that Sara, whom like Aggie she'd somewhat respected, is a "sodomite." She therefore, along with Samantha, backs Meg's suggestion that the clique exploit the Sara "opportunity" instead.
Charlotte, with Tharqa's voice-over contribution as an interviewer, films a YouTube
video of herself, in silhouette and with a thinly-disguised voice, tearfully accusing Sara (without actually naming her) of raping her after school in order to remind her that she and her "girlfriend" (implied to be Penny) "own" the school and everyone in it. Afterward, Tharqa and Charlotte have a laugh over what they've just done; however, a close-up of Charlotte, still smiling but with laughter changing back into crying, suggests that she's drawn on an actual past trauma for her performance.
At school, Sara discovers a sensationalistic poster (drawn by Samantha) portraying her in silhouette and (again, without naming her) warning she's a sexual predator, as Bob and Elmer make suggestive noises at her. Turning to Daphne for support, she finds instead that her friend, angry and in tears, apparently believes Charlotte's story (which Sara doesn't yet know of). Daphne says she knew there had to be a reason she still hung with Penny, and walks away.
As Sara watches the video in horror, Penny turns on the charm with Braz in order to find out why people have been attending parties other than hers; Braz tells her to "stop faking." At rehearsal that afternoon, Duane tells Penny that he too believes the gossip about her and Sara being a couple. He doesn't believe the other accusations, but he'd rather think she's gay than that she wasn't attracted to him when they were dating. Penny assures him she's straight. Duane takes her word for it, but warns her she'll have to convince everyone else.
Later, a furious Sara finds Charlotte and shoves her against her locker, drawing Penny's and Aggie's attention. Penny intervenes, telling Sara that violence won't help. (Charlotte's response is surprisingly meek and fearful.) As Aggie verbally shoos Charlotte away, warning her it's not over, Sara throws her arms around Penny and weeps loudly, drawing a crowd. Penny becomes uncomfortable and tells her "people are watching." Hurt by what she interprets as a lack of support from her best friend, Sara walks away, sarcastically promising not to "compromise" her.
Penny tails Meg to the next popsicle party in order to confront Karen, having apparently guessed she's behind the slander. Feigning shock at first, Karen soon admits she expected Meg to lure her there. A drunken Cyndi greets Penny and soaks her with a hose, thus revealing her to have been Karen's mole. Karen and the others ignore Penny's protests, and as Penny stalks off, Karen assures herself that "They don't love her any more. They love me. I win. I win."