This episode begins with Lacey, Brandi C. and Megan expressing their disgust over Angelique's elimination and agree that Brandi M. should be the next one eliminated. The girls then receive a note asking them to dress in their favorite outfits. They do so and then go to the classroom where the instructor, celebrity stylist Melissa Meister, reviews the outfits of Brandi C, Megan, Rodeo and Heather, saying that they were distasteful and not classy. They are all asked to choose three girls to be made over. The girls choose Brandi C., Megan and Heather, who are then informed that they will be modeling. They are then informed that they must divide up into three teams, and that the three models will choose their teammates. Heather chooses Jessica, Dallas and Destiney; Megan chooses Lacey and Rodeo; and Brandi C. chooses Kristy Joe, Brandi M. and Inna. They are then told they will receive $300 to go shopping at a thrift store to assemble three outfits each for their models: one for a job interview, one for a cocktail party, and one to wear to meet a boyfriend's parents. They are given an hour and can use only the items they buy at "It's A Wrap", a thrift store that stocks clothing that has been used in movies and TV shows. Megan dislikes all of the choices her teammates make for her. The hour is nearly over so they rush to the cash register. Megan notices that Rodeo had a bracelet, and realizing that her team had no accessories, she takes the bracelet off Rodeo's wrist and considers putting it in the bag. Megan notices Brandi M. watching her so she puts it back. Rodeo confronts Megan and Lacey about it back at the house, while Megan and Lacey retort saying that Rodeo told them to take the bracelet. The discussion degenerates into screaming. The next day the groups meet at the site of the fashion show and watch while their clothes are thrown into a pile, torn and stained. They are given one hour to repair the damage as best they can and then model the clothes. Project Runway season 3 winner Jeffrey Sebelia serves as a guest judge and critiques the girls. Heather's team is up on the runway first with Destiney as their emcee, and their performance is well-received all around. Megan's team goes second with Rodeo as emcee. While Megan is interviewed on the runway, she mentions that she dislikes her second outfit, but as the emcee, Rodeo claims that she loved it. Then it was vice versa with the third outfit, which led to arguing and both contestants being warned by Sharon. Then, Brandi C.'s team goes up with Inna as emcee. Brandi C. does well on the runway, but Inna stumbles over her lines, not having rewritten them since the damaged outfits were reconstructed. In the end, Sharon says Megan's team had the best looks, but Megan's team is prevented from winning because of poor teamwork evidenced by the bickering, and possible cheating. It is between Heather's and Brandi C's teams. Heather's team eventually wins because of Inna's poor delivery and how she presented herself, wearing flip-flops and dirty hair.
When they arrive back at the mansion, Rodeo reports to Sharon's office to speak to her about the bracelet incident. Rodeo breaks down emotionally, explaining that she hates being called a liar. Sharon thinks Rodeo is "a lovely woman with a big heart", but worries about her emotions sometimes getting the best of her. Afterward, Sharon calls Megan into the office and asks her if she tried to cheat. Megan denies Rodeo's accusation. At elimination, Sharon calls down Inna, Lacey, Megan and Rodeo. After sternly disciplining Lacey and warning her to shut up, Sharon focuses her attention on Megan, calling her a "backstabbing conniving little bitch", and warns her that her attempts of deception will fail. In Sharon's interview, she says that she has a strong desire to change Lacey and Megan, which is why they were not eliminated. It is then down to Inna and Rodeo. Sharon tells Inna to take pride in her appearance and spend some time in the morning on looking presentable, then sends her back. She eliminates Rodeo, saying that being in the house is doing more harm than good to her, and feels that Rodeo does not need Charm School as much as the other girls do. Dallas and most of the other girls are upset and feel that Megan staying is unfair because she lied and tried to cheat.