At Buffy's 19th birthday party, Giles finally realises that he is a middle-aged man hanging around with a bunch of teenagers and starts to get depressed about his life. He feels even more like the third wheel when he finds out about Riley and the Initiative, which Buffy neglected to tell him about. When Ethan Rayne returns to town, instead of kicking his butt back to England, Giles goes for a drink with him. The next morning Giles wakes up and notices that he has turned into a demon.
Buffy and the gang find out about the demon and think that it killed Giles but he can only speak in the demon's language and runs away. He ends up at Spike's crypt who can understand the language and Spike helps Giles (at a price) to find Buffy and to explain what happened and also find Ethan to change him back. Buffy arrives at Ethan's motel room and fights Giles, but she looks into his eyes and realises that it is really Giles beneath the demon form. Buffy then kicks Ethan's butt and reverses the spell.