A street gang named the Dragons begin causing trouble at Rachel's Place, breaking things and sexually harassing employees; Carl arrives just in time to chase them out. That night, after closing time, the gang breaks in and heavily vandalizes the teen hangout. Everyone's anger grows when a bruised and bloodied Eddie arrives, announcing he was ambushed by the Dragons' gang members. Carl wants to take matters into his own hands, but Urkel reminds him that if he were to do that, he'd only destroy much more than his career. Urkel eventually agrees to go undercover as a prospective gang member and trick them into confessing their recent activities.

Urkel and Carl are forced to share the same hospital room, when the nerd suffers from appendicitis and the cop wounded while trying to foil a robbery.

Waldo's fragile self-esteem takes a huge hit when a misunderstanding he caused results in Eddie's girlfriend leaving him. Waldo decides the only way he can cope is to join the Army Reserves. Urkel finds out and insists that Eddie go look for him and apologize before Waldo makes a big mistake. Of course, Urkel, Eddie and Waldo wind up causing a whole lot of hijinks and get on the wrong side of a tough drill sergeant before they can talk things out. Meanwhile, Carl and Harriette deal with a shady repairman.

Urkel warns Laura not to ride in Curtis' car because of his reckless driving habits. Curtis is annoyed and eventually, the two challenge each other to a winner-take-all drag race.

Eddie enrolls in a ballet class to improve his basketball skills. He is invited to participate in an upcoming recital and chooses Greta as his parter, but on the day of the show, Myrtle shows up instead.

When their respective dates are unavailable for the prom, Urkel offers to take Laura to the senior dance. The night is Urkel's dream come true ... and a wonderful time for Laura as well.

When 3J goes missing from the orphanage, the Winslows tries to find him. They are unaware that Richie is secretly housing him in the attic and begs Steve not to tell anyone about it. The truth is later revealed by the nerd as he uses one of his devices and finds 3J in the attic. Carl and Harriete adopts him when they reveal that they care about his well being. Meanwhile, Laura starts dating around with Curtis to take her mind off of missing Stefan who is in Milan.

Steve and Carl heads out into the woods to get a Christmas tree. The nerd annoys him by rejecting some of the trees until he snapped and tells him they are taking this tree. After they cut it, the were trying to hurry back before the snow got really heavy. Unfortunately, it obliterated their tracks and they end it lost. While sitting by the fire, Steve and Carl apologizes and bond. Then the nerd is able to use the constellation to get them home. Meanwhile, Eddie and the rest of the family are exchanging gifts until Harriette tells them Stefan is here. Laura finally calls it quits with Curtis and stays with her current boyfriend. Her ex-boyfriend angry and warns Urquelle if he hurts Laura in a matter he hates, he will pay for it. Stefan tells him that he won't hurt her in the emotional way that Curtis did.

Laura becomes involved in a love triangle between her, Curtis and Maxine.