A hilariously spooky Halloween episode finds the couple engaged in amorous horseplay (Dharma showing Greg how to do a strip-tease for her) on the eve of their house-warming party when the dogs sniff out something eerie in their new apartment: a hidden storage closet full of antique dolls. Although Dharma senses evil, Greg talks her into going ahead with the event while he cleans away the dolls, but in the middle of the party Dharma discovers the dolls have quietly returned to their former positions, together with two new dolls which bear an alarming resemblance to Dharma and Greg.
Abby intervenes with an exorcism (to Pete's amusement), then all seems well until the newlyweds hear heavy footsteps in the attic at midnight, and discover a single doll hung from the ceiling. Greg determines to spend all night in the attic to find out once and for all what is going on, joined by a reluctant Dharma, and they are both terrified when a trapdoor opens to reveal a screaming elderly woman who demands to know what they are doing in her attic.
It turns out she makes dolls as an innocent hobby, basing them on people she sees from her window and hanging them up to dry at night. She invites them for tea; but when Dharma and Greg arrive bearing a cake, they are told the old woman died fifteen years ago. Once the couple has headed for the hills, the old woman and Jane appear: it was all Jane's Halloween prank.