Frasier receives the Lifetime Achievement Award from the Seattle Broadcasting Awards. His mentor from Harvard, Professor William Tewksbury, sends him a congratulatory basket of flowers, with a note attached. Frasier over-analyzes the wording of the note and visits Tewksbury, who unearths that Frasier is experiencing deeper emotional problems. Meanwhile, Daphne is literally gaining weight by the minute, which is obvious to everyone but herself and Niles.
Frasier and Niles realize their helplessness when Frasier's car stalls, so they enroll in an auto repair night class. They quickly fall behind, and understand what it's like to be remedial students. They then take the part too far and degenerate into class clowns and become disruptive. Martin helps Roz pick out a new puppy, but after dog-sitting a few times, he starts to take over the puppy as his own.
Frasier and Niles try to reawaken the career of Jackson Hedley, an old actor they saw perform Hamlet when they were young. When they see him perform again, however, they realize that he is talentless and will humiliate himself.
Frasier is supposed to go to a speed-dating event and asks Roz if he should wear a suit or sweater, remarking that the slightest decision can have far-reaching effects. We are shown what would have happened in each circumstance: wearing the suit, he is knocked to the floor at Nervosa by a cute girl named Monica, and they hit it off, while Roz meets a handsome co-worker named Mike; wearing the sweater, Mike is the one knocked to the floor by Monica, and Frasier goes to the speed-dating event, which ends up a disaster.
Kenny arrives at Frasier's place in a panic after unwittingly making a date with a woman even though he's married. Frasier agrees to go and cancel the date, not knowing that Kenny's wife has already chased his date away and is waiting there in her place. Thinking she's a single woman, Frasier asks her out, and she says yes. Daphne's eating problem comes to a head when she starts hiding food throughout the house and Niles finally notices her weight gain.
Frasier receives tickets to the Sonics game and goes with Martin and Niles (even though he and Niles actually had other plans). Niles is selected to attempt the halftime half-court shot, and miraculously makes it. He shamelessly drinks in the adoration of Martin and the rest of Seattle, much to Frasier's chagrin.
Roz gets the green light to put on a special radio show about outer space, and agrees to let Frasier narrate. However, the two fail to come to grips with their reversed roles (Roz calling the shots instead of Frasier) and he leaves the show. She replaces him with the astronaut John Glenn, and Frasier tries to use him to get his rejected ideas into the program.
Frasier and Niles throw a fancy party to try to convince Penelope, the trustee of a foundation, to donate money to the failing prep school they attended as children. Martin hits it off with her and they go on a date, but afterward he meets another woman named Estelle and decides to date her as well. He's confident in his juggling abilities, but isn't nearly as good as he thinks. The sons race to try to get the money before Martin drops the balls.
Niles picks up Daphne from fat camp, and plans a weekend away where they'll sleep together for the first time. Daphne discusses with him her sessions with the camp's therapist, who diagnosed her overeating as a reaction to trying to live up to Niles' perfect image of her. He dismisses this theory obnoxiously, and Daphne throws him out. Frasier helps Niles see the light by revisiting key moments between them.
Even after Daphne's premonition of Niles getting hurt comes true, he says he needs scientific proof before he will believe in her abilities. So they hire a psychic evaluator to put her skills to the test. Meanwhile, Roz has started dating Frasier's mentor, Dr. Tewksbury, but Frasier has a major hang-up with their relationship.
Frasier meets Claire French, a friend of his previous girlfriend Lana Gardner. She is exactly what he is looking for in a woman, but he loses out to another suitor at Lana's birthday party. Lana agrees to try to hook him up with Claire, but it's gonna cost him.
Frasier's study sessions with Lana's son Kirby are not going well, which threatens his chances of ever seeing Claire again. He learns that Kirby isn't studying because he's still not over breaking up with his girlfriend just days before the senior prom. After Kirby shows interest in Roz during a Nervosa study session, Frasier promises to get Roz to be his prom date if he gets to studying.
Frasier spends the day with Lana helping her sell a house. Niles spends the day with Daphne and Eddie in the dog park. Martin spends the day at a parole hearing for the man who shot him in the hip so many years ago.
Frasier books a romantic weekend in Belize with Claire. On the drive to the airport, Lana suggests that he doesn't know how to be happy, but he completely disagrees with her. That sparks a series of events that utterly ruin his weekend, and he now wonders if maybe she is right.
Frasier is torn about whether Claire or Lana is right for him, and asks everybody under the sun about what he should do. He even gives counsel to a fan, who happens to be facing a similarly difficult decision, and makes his decision based on what the fan decides. Little does he know the ramifications this chance encounter will have.
Lana is less than happy when her ex, Bob (the man Frasier counseled in Part 1) returns. She throws him out and looks to Frasier for advice. He swallows his feelings and advises her to take him back, leaving Frasier alone again. He takes a trip to clear his head and figure out his problems with women, which go back much farther than he ever dreamed.
Daphne stumbles across a file of one of Niles' patients, who is in love with him via "transference". Niles refuses to talk about her, citing patient-therapist confidentiality. Daphne's paranoia sends her to extreme lengths to learn anything she can about her. Meanwhile, Frasier is taunted by a rather chirpy cricket.
Frasier throws a Halloween party where the guests come dressed as their personal heroes: Frasier of course is Sigmund Freud, Martin is Joe DiMaggio, Daphne is Elton John, and Roz comes as Wonder Woman. However, Niles' choice of Martin as his hero gets under Frasier's skin.
It's been eight years since Martin moved in with Frasier, and the realization of that fact has irked Frasier. This sparks a series of spats between the two, which comes to a head when Martin accidentally ruins the carpet. Frasier's belief that "there is no such thing as an accident" leads him to accuse Martin of a sub-consciously malicious act. However, when Frasier unwittingly burns Martin's favorite chair, the shoe ends up on the other foot.
Frasier has just completed his 2000th radio show, but discovers that one of the tapes of his collection of his broadcasts is missing. His quest to replace it borders on obsession, sending him spiraling into depression.
Kirby stops by KACL looking for a job, but Frasier gives him the brush-off. Niles comes across a case of rare wine, and reneges on his standing agreement to split such finds with Frasier. As revenge, Frasier dupes Niles into taking on Kirby to rearrange his library. Niles learns that Kirby has access to a reclusive man's wine collection, and tries to weasel his way in. Once Frasier also learns about it, they one-up each other trying to buy Kirby's favor for the one and only invite to the cellar.
Frasier's show has been losing the ratings to a hot new program, Dr. Zach, which has a heavy advertising budget. KACL refuses to match their exposure, so Frasier calls on Bebe to turn the screws. When she tries to turn him over to her assistant/junior agent Portia, he discovers that she's been representing Dr. Zach personally. Frasier severs ties with her agency, or so he thinks. Portia proves to be more forceful than her tiny stature would indicate. Martin runs out of cholesterol pills and asks Niles to write a quickie prescription, but he refuses on principle.