Now Michael Kelso has found out about Jackie and Hyde, he's crushed and out for vengeance - alas his attacks on friend Steven have the same sad result as always, a black eye for poor Kelso. Kitty is walking on clouds because of her pregnancy, so she invites her parents over, alcoholic Burt Sigurdson and commands-shouting Bea Sigurdson, but the gynecologist changed her big news: she's not expecting but entering menopause; one day too late for otherwise relieved Red: his 'baby' the Corvette is already sold.
Red considers Kitty's menopause the worst threat since the Korean war. For college orientation day, the Foremans drive the boys -Michael Kelso brings a note from his parents pinned on his lapel, but spent the $30 on a video-game- to state college UW, Bob decided Donna must go to private Marquette with Jackie. Being apart is a depressing prospect, but while Red is shocked by the 'hippies' the kids love the colleges, only Hyde and Jackie are miserable as they play stupid power games. Donna decides to go to UW just for Eric's sake.
Kitty's menopause still makes life at the Forman house miserable, so Red gives her an orphan lap dog. In no time Schotzie is her favorite 'baby', making Red even more miserable. Eric is so grateful for Donna being prepared to join him at college for the next four years that he decides to get her a cool gift, and after some hesitations even considers a wedding ring. The other basement gang boys decide that thought deserves wearing the stupid helmet. Yet, when Donna drags out of him what his intentions were...
It's Thanksgiving day and Eric can't tell Red about failing math or about his secret engagement to Donna. Red may reward Eric's (alleged) maturity at dinner and Kelso's 'dating' Eric's math teacher. Kitty's Mom and Dad add to the chaos.
The news Jackie's dad councilman Burkhart had to resign after embezzlement charges convinces Kelso she'll soon be running back to home for a comforting shoulder, as Steven's remains as cold as his heart. 'Perfect couple' Eric and Donna finds they disagree whether the way to go is closeness or giving space, and asking the equally divided Forman parents only causes another menopause-crisis... Fez enjoys bossy boss Nina giving him a stern lesson in fingerprints-taking, but the ink leaves its black mark on her and a part of him he normally only touches, a lot... Kelso has...
When Fez finally agrees to present his DMV girlfriend Nina to the gang, Kitty decides to give a formal dinner party, just when Red wanted to see an annual TV challenge special, Battle of the Network Stars. Eric and Hyde object to their girls making them come; when Jackie even wants Steven to wear decent cloths, he really refuses, so she accepts an invitation from her ex Kelso, who wasn't allowed to come alone. All the men soon run off from the horribly boring party. The boys' last hope to hold out against a girl is Fez- even Kelso knows better.
Now Jackie's dad is indicted, their cabin must be emptied, so she and Kitty force Red, and he Eric -annex Donna- to help with the heavy lifting. Because of Jackie's lie to go to a dolls convention, Hyde took Fez and Kelso there. Alas just when Kelso finds the weed stash, Red's gang arrives, except Eric and Donna who got lost on the way, but end up preparing his parents a surprise on the kitchen table no less disgusting.
Annette, Kelso's girl-fiend from his and Donna's California exile, , comes to visit Michael Kelso but stays with Donna, who insists Jackie must join them. Jealous Jackie hates Annette like bubonic plague, but seems to warm to her, until... Kitty's parents turn up unannounced from Arizona: Burt has lost all their money on an ostrich farm which got wiped out by coyotes, then has a fatal heart-attack while sneakily watching the girls' slumber party, like the boys before him. Grandmother as merry widow is a grim prospects for the Formans...
Donna's dad Bob and his partner Joanne are off for the weekend, so they plan a weekend together, but the gang is determined to throw a party there, and unforgiving when they really refuse it. A call from the jeweler makes Kitty think Eric's engagement ring for Donna is for her, but she finds out while taking 'poor orphan' Hyde shopping for a new coat, which turns out an Evis-flashy jacket, yet tries to help preventing Red finding out, but the next paternal tirade makes Eric spill the beans himself.
Now their parents know and worry about Eric and Donna's engagement, Eric is terrified and shunned by Red, Donna goes plead their case. Fez' boss and lover Nina decides to clear the air and his tension at work by asking him to stay for the night, all the way; when he reports to the gang, its sounds all but romantic or efficient, but Nina has her own conclusion. Hyde didn't even know about Jackie's birthday, Kelso gives her a perfect sweater. Eric claims he'll marry Donna even if he must pay the wedding himself, Red fires him...
Since Red ruined Erics life for getting engaged, their rowing gets worse for weeks, even chases the gang away. Kitty signs them up for a charity father-son Point Place Paul Bunyan pioneer event; they still fight and get creamed by Charlie and Mitch, an apparently perfect pair; as events progress the team' temperaments seem to get reversed, but at the end -a loss- nothing has really changed. Hyde doesn't believe Leo has just disappeared, so the gang look for him in his apartment; the new tenant has a note and a gift for Steven...
Now most kids are out of a job income, they all head for the job fair, Eric and Hyde being fired, Kelso after getting a ticket from a female cop made him doubt if his looks will last, Donna as 'hot' appetizer for her radio station. Red raises the stakes: if Eric sticks to marrying Donna, he'll stop the dumb ass's college funding. Most available jobs are revolting, yet Hyde becomes cook for his former 'big brother', a worse social cripple then him; Kelso decides to become a cop because the uniform would prolong his beauty many years. Eric found a bank teller's job, but...
Donna finds having Jackie as 'guest' is hell, only more invasive than an occupying army. Kelso hopes he'll be a tough cop in a year, but needs a less sissy job than model- Hyde's boss Roy engages him as kitchen hand, but bastard Steven pretends to be his boss, qualified to fire him after a trial period, which the scum turns into a non-stop hell-week, even in the Forman basement. Eric can't meet the payments for Donna's engagement ring, even after selling LPs. Fez is still drifting on a pink cloud called Nina, yet as horny as ever.
The basement gang realizes their lives, conversations and routine are boringly repetitive, so they consider inviting a new member, but Kitty forces upon Eric Lance Crawford, a creepy kid, just because she's after his mother's peach cobbler recipe, but he came prepared... Nina tells Fez she 'needs time, but it's not his fault', the gang translates she's dumping him unless he can make her jealous by playing aloof, but when that finally works...
Fez dreads impending graduation as he probably must return to his lizard-infested country afterward, so he gets Kelso and Hyde to observe a truce in their Jacky-war to join both on a camping trip by the lake with the whole gang, plus Eric's stupid sister Laurie. Kitty is on heavy tranquilizers as she can't handle her 'baby boy' moving out. After a failed ghost prank by the campfire Eric was to skinny-dip with Donna, but ends up screaming butt-naked with Laurie, who next does it in Kelso's van with Fez, who gets even more out of it then sex... Kelso and Hyde's rivalry ...