Eager as ever, Captain Mainwaring takes charge of the HQ-instructed physical training. The men's wariness to 'strip down' for it was right, Pike's mum embarrasses everyone when she drops by. The military challenge follows in the person of Captain Ogilvie, who announces his professional troops will attempt to penetrate the Home Guard platoon's HQ by way of exercise.
The platoon have been told that at the invasion signal, the ringing of the church bells, they must meet up at one of two rallying posts, Godfrey's cottage or the Novelty Rock Emporium. When the bells sound half go to the one and half to the other. Jones has forgotten his helmet, and Godfrey lends him a German one, which leads to his being mistaken for the enemy and fired at. Godfrey's sisters shake a table-cloth out of the window and this is interpreted as a white flag of surrender until Warden Hodges explains that there is no invasion, it was all a mistake.
When Private Walker gets his call-up papers to join the regular army it comes as a shock to the platoon because he is useful to them for his black market activities. Wilson is chairing a committee and tries to get him turned down whilst Jones has him jumping off a ladder barefoot to induce flat feet. Ultimately he does get turned down because he is allergic to corned beef.
On parade Mainwaring notices that Wilson is looking even more distracted than usual and asks him what is wrong. Wilson has heard Mavis telling Pike that 'a little Arthur is on his way' and assumes that he has got Mavis pregnant. Mainwaring tells him to do the decent thing and marry her but when it turns out that the little Arthur is a ten-year-old London evacuee that Mavis has taken in there is no wedding.
Captain Mainwaring is told that he can promote one of the privates in the platoon to lance-corporal and he chooses Frazer as being the most efficient. Unfortunately this leads to a bitter rivalry between Frazer - who keeps dishing out charge sheets and becomes unpopular - and Jones, culminating in a fight between the pair of them, and ultimately Mainwaring has to return Frazer to the ranks.
Whilst on fire-watching duty the platoon see a man shining a torch. He speaks with a European accent and has a dog called Fritz and they arrest him as an enemy agent. However, the man - Sigmund Murphy - tells them that he is a British subject and even helps them put out a fire in the church hall, after which Hodges explains that Sigmund is indeed a British citizen and the husband of his Auntie Ethel.