Reese, having deserted the army is trying to find his way home. Lois discovers his fate and goes in search - eventually to the Middle East. After cornering him with the help of some locals he is dragged back home by his ear. Meanwhile Malcolm and Dewey try to honor his probable death by doing something Reese would do.
Lois finally gets Dewey out of the Buseys special needs class. In response to losing their new 'leader' they run away to be with him. Hal, still has no job and picks up a bunch of, dumb but nice, body builders for his latest manic craze.
Lois returns to work at the market as a probationary employee and takes offense at the racist advertising standee for malt liquor. She hopes Malcolm will see her point of view but he is resistant and this leads to a battle of wills between the two. Hal is involved in another battle of wills; this one with the garbage man.
Malcolm and Reese's teenage neighbor and former babysitter Jessica(see episode #4.13 "Stereo Store") barges into the Wilkerson household and has tricked each of them into believing the other is gay. Meanwhile, Hal's frequent competition with a neighbor who always outdoes his Christmas decorations, includes a new element to his holiday decorations memorializing the Battle of Pearl Harbor.
Strapped for cash for the holidays, Hal and Lois decide that all Christmas gifts this year should be handmade. But when Hal sees the thoughtful, quality gifts the boys made, he feels bad about his shoddy attempt and panics.
Hal is stressed about a gift for Lois for their 20th anniversary He begins sleepwalking, and Reese discovers Hal is highly suggestible in that state. Meanwhile, two of Dewey's Busey classmates run for student council.
Trying to win a battle of wills with young Jamie, Lois brings Francis home to help her remember how she conquered him when he was a baby; and Malcolm, Reese, and Dewey struggle to dream up a fun use for an old diving board.
Malcolm uses his illegal gambling profits to buy a junk car, which quickly takes over his life; Hal discovers a talent for hair styling; and Lois discovers Craig is having an affair with the boss' wife.
When Lois comes out of the store and catches the boys vandalizing a suggestive billboard from a strip club. Malcolm decides to challenge her by changing the display to "I Want Respect", thus starting protest against it. Everyone in the lot believes them and follows the ruse. However, Lois doesn't believe them and thinks they're just being hooligans as usual.
When his parents fight over a new bed, Dewey writes an opera based on their arguments; Malcolm gets into "street luging" and becomes obsessed with beating a cocky rival, unaware the talented competitor is Stevie; and Jamie has his first crush... on a baby he sees through the window.
Hal Wilkerson has a hard decision on his hands, one of the neighbors has been in a coma and he has to decide whether or not to keep him on life support or pull the plug. He's always turned to Lois to make decisions for him. After another argument between the nurse and the doctor, he ends up paralyzed from the waist down. Meanwhile, Craig enlists Reese, Malcolm and Dewey to help him fight dirty against a childhood bully, who is indeed his estranged, healthy father.
When Hal and Lois carve out some time for deep personal discussions, Hal is upset to learn Lois doesn't believe in an afterlife; Malcolm is roped into emceeing a silly charity auction at school, but can't help taking his responsibility seriously; and Reese feuds with Jamie.
When Grandma Ida visits the family once more, she ends up saving Dewey's life from being run over thus having her leg amputated. Lois forces Francis to take care of his grandma as he's unemployed. Meanwhile Reese and Malcolm decides to go three days without sleeping on the grounds that one of them will be super glued if he fall asleep. Dewey tries to have a leg funeral after feeling bad about what happened to Ida.
Malcolm gets promoted to a position promoting the Lucky Aide from atop a pair of stilts; Hal tries to make up for accidentally blowing the household budget on a phone-sex line; Dewey thinks Jamie has found a stash of Lois' jewelry hidden by Francis years ago; and Reese joins multiple drug studies.
Unable to function without Dewey, Buseys special needs class panics and takes their teacher hostage when he threatens to call the police on one of the kids for a minor infraction. After other faculty members are taken, a return visit from Dewey accompanied by Francis leads to a new revelation about the "education" the kids are receiving.