The boys discover a box full of song lyrics that Martin wrote for Frank Sinatra; with their help, he sets one to music and sends it off. Frasier tries to compose a sincere eulogy for a despised late aunt, while Niles tries to find the perfect place to scatter her ashes.
While moving Martin's chair in preparation for hosting his wine club meeting, a tiny scratch on the floor sets off an avalanche of repair work in his apartment, sending Frasier into panic. Niles is furious and heartsick when instant chemistry arises between Daphne and his building contractor, Joe.
Kate cancels the annual raise for the station staff; with Roz's encouragement, Frasier organizes the on-air talent to strike, and is elected to negotiate with Kate. Their negotiation turns into a vicious argument, which turns into a passionate affair.
When Kate announces that she is leaving to manage a station in Chicago, Frasier tries to explore the possibility of a deeper relationship with her. He follows her to the airport for a romantic goodbye, but her flight is delayed, leaving them time to find out whether they really have anything in common.
Frasier sends out a radio call for a new friend, and ends up meeting Bob, a barbecue-obsessed photographer. Frasier can't stand the man's company, but because Bob is in a wheelchair, feels too guilty to dump him.
After Joe spends the night with Daphne, Frasier feels uncomfortable and asks her not to entertain guests in his home. Daphne proposes that she take an apartment of her own. Frasier eagerly agrees to this, looking forward to getting his study back, but changes his mind when a weekend without Daphne leads to he and Martin nearly killing each other. Niles sinks deeper and deeper into denial as his separation from Maris leads to his shutout from his circle of high-society friends.
On Martin's advice, Niles asks a woman to a high-society ball, but panics when he realizes he can't dance. Daphne gives him lessons in Frasier's apartment, and the two of them have a great time. When Niles's date cancels, Daphne goes with him to the ball, and they dance a passionate tango.
Diane Chambers visits Frasier in Seattle to promote a play she has written. Frasier decides it is time to vent his feelings about how much pain he felt when Diane left him at the altar. However, he forgets to when Diane breaks down in the middle of dinner and confesses her life is a wreck, and she needs his help again.
The police issue a warrant for Maris's arrest after she fails to pay a stack of unpaid parking tickets. To help their reconciliation, Niles goes to a local "fixer," Jerome Belasco. Jerome solves the problem, but wants a favor in return: Frasier must advise Jerome's fiancée, Brandy, to marry him right away.
In honor of February 29th, Frasier encourages the people around him to "take a leap" and do something outside their comfort zone. Unfortunately, their attempts result in failures and make him have doubts about his own leap.
After a day and a half of experiencing other people's rude and inconsiderate behavior, Frasier reaches saturation point when a man casually steals his and Niles's table at Cafe Nervosa. Frasier ejects the man from the café. Next day, he is hailed as a hero in the paper, but is horrified when his act sparks off a series of "etiquette lessons" by people all over Seattle.
Niles eagerly agrees to appear as an expert witness at the capacity hearing of an elderly timber baron, knowing that the proceedings will be televised. The man approaches Frasier for a second opinion. Frasier agrees to meet with the man, and finds him perfectly sane, leaving him no choice but to testify against Niles in court.
KACL's new owner, an eighty-five year old Texan with a nationwide chain of radio stations, has a job for Frasier: make his fiancée quit smoking. Frasier reels when he realizes the woman is Frasier's agent, Bebe Glaser.
When Roz is depressed about her love-life, Frasier advises her to look for a less-flashy, more substantial kind of man. He is alarmed when she starts dating one of Niles's patients, a compulsive womanizer. Frasier can't tell her the truth without violating doctor-patient confidentiality, but his oblique hints about the subject lead Roz to conclude that Frasier is romantically interested in her.
Frasier's show is aired to a focus group. Eleven out of twelve people have nothing but good things to say, but Frasier becomes obsessed with the twelfth man. Niles repeatedly tries to provoke Daphne after getting turned on by a fierce argument with her.
On the third-year anniversary of Frasier's show, Roz gives him a tape of their first broadcast. Frasier listens to it, flashing back to his rough first day on the job, and his rougher attempt on the same day to reconnect with Martin.