Ceilidh doesn't really care about Joe's placement anymore, but the fact remains he hasn't been to school much lately, and whenever he has he's been avoiding everyone. His grades are slipping rapidly, and final exams are not far off.

Similarly, Helène has been disturbingly antisocial, concentrating all the time on schoolwork. She and Alan are never seen together anymore, and she is never as chipper as she used to be, let alone as much as Nancy Kawasaki has seemed lately.

Phoebe becomes concerned about Ceilidh's ill feelings toward Joe, and how it must be affecting him, considering he is likely to fail his final year of school. Ceilidh is reluctant to help him, but Phoebe is insistent.

As it turns out, Helène is the first one to go to Joe with help. She explains that it was actually a good thing he did to break her up with Alan, and she begins to tutor Joe for final exams. In the end, Ceilidh reveals to Joe that she pushed Helène toward helping Joe, and in doing so acknowledges that Helène would probably be better for him than she ever was.

After an ill-advised road trip throughout southeastern Ontario for Taco Bell, final exams come and go, leaving everybody relatively unscathed and prepared to graduate.

Grad night arrives. There are a few surprises: Alison attends despite her threats to work the cafe that evening, Alan shows up with a Grade 12 girl that few people recognize, and Nancy shows up with a boyfriend (and subsequently tries to avoid all attention throughout the evening).

Deirdre comes along with Ryan, and reveals that she'll be going back to Guelph to finish her university degree. At the same time, Ryan reveals that he has given up his spot at Waterloo to join her. Similarly, Joe has accepted a spot in applied science at Queen's, joining Helène.

As the evening wears down, Ceilidh wanders out for some fresh air, and Phoebe follows. Phoebe confesses how much she has relied on Ceilidh for emotional support lately, and how grateful she's been for such a close friendship. Ceilidh, realizing how awkward Phoebe seems, hugs her, and explains the feeling is mutual. Subsequently, Phoebe kisses Ceilidh, and explains she feels love for her. Suitably flabbergasted, Ceilidh isn't sure what to do about this prospect, but Phoebe implores her to consider a different type of relationship.

Joe wanders out shortly thereafter to find Ceilidh and Phoebe chatting. Phoebe decides to head back inside, leaving Joe and Ceilidh alone. Joe ends up apologizing for how he treated Ceilidh throughout high school, insisting she deserved better. She explains she deserved exactly the learning experience she received, and that they each have new relationships to worry about. Mildly curious -- but respectful of Ceilidh's secrecy -- he starts back inside, but noticing happy tears in her eyes, he offers Ceilidh his handkerchief, and promises to drop by her place from time to time over the summer.

(Epilogue: Joe starts to explain to Alan how he arrived at the grad party with a dryer sheet stuck in his shirt, but is unable to find it in his pocket anymore. He can find his handkerchief, though...)