Niles is considering becoming a father (at this stage his marriage to Maris is still lumbering along). When a taxi driver goes into labour while carrying him (leading to a comical scene in which Frasier's over-analysis and Niles' wimpishness mean that Martin is far more help to the lady), he decides to do an experiment - he will carry a sack of flour around for a week, to get some idea of what parenthood involves. The thought of childbirth leads Daphne into one of her eccentric moments, a row with her mother in which she plays both parts.
After a joke comparing a bag of flour to Maris (both are bleached, 100% fat free and best when kept in an airtight container), he proceeds to have several accidents with the bag. He stabs it with his chopsticks while playing Brahms, has him slide off the roof of his car, kicks it into a pool while practising karate, and then finally has it catch fire. As he points out, "it's not as careless as you make it seem; after all, a real child would have cried before bursting into flames". There is another great moment when he describes a paranoid dream he has - the flour sack is kidnapped and the kidnappers send muffins in the mail (watch out for Daphne's bemused but slightly sympathetic laugh at this point). He sadly concludes that he is not ready for parenthood. There is also a side story - Frasier writes "dear Clarence, you're not getting older, you're just getting closer to death" on what he believes is a birthday card. In fact, Clarence (a security guard at the station) has had a kidney transplant! He has to therefore steal the card and replace it with an identical card with identical greetings from everyone else.
This is one of the best episodes up to this point. The writing is punchy, the concept original, and the conclusion (especially Martin's thoughts on parenthood) strangely touching.