Tohru is stunned that all three guys have turned into animals. She rushes downstairs to answer the door, and the mailman just brushes off her cries for help. After the mailman leaves, the animals argue but they're talking. Shigure, who turned into a dog, stops and explains what's going on: The Sohma household has been under a curse where whenever a member of the opposite sex hugs them or if they get stressed out they turn into their animal on the Zodiac. Then it's just a matter of time before they turn back. Only that when that happens, POOF, they're naked. Tohru hides her face in the wall.
With clothes on, Shigure explains again about the curse. Shigure and Yuki talk about Kyo being such a cat, and that angers Kyo so much he slams the table and challenges Yuki to a fight. Yuki and Kyo have a quick fight, but Yuki delivers a kick to Kyo, knocking him out of the house. Tohru remembers that it's time for school. As she and Yuki leave, Shigure informs them he is going to tell Akito, the head of the Sohma household, about the living arrangement.
At school, the Prince Yuki fan club are at it again, harassing Tohru, when Uo and Hana come and chase them away. After her classmates leave, Yuki arrives and talks with Tohru about the curse. Apparently there is a chance that her memories may have to be erased. At some point Tohru accidentally hugs Yuki and he turns into a rat. Yuki continues with his story: When he was a little boy, he and some other kids were playing in the woods. One of the girls tripped and hugged him and he turned into a rat. That day all the kids' memories had to be erased. Tohru decides she is okay if her memories get erased as long as they can stay friends. Yuki agrees, and POOF! Oops he's naked again.
Akito and Shigure talk. Akito decides he will trust Tohru for now.
Tohru and Yuki return to the Sohma House. Tohru finds Kyo in the bedroom, fixing the roof. Kyo is about to apologize for this morning when he's interrupted by Shigure calling. Shigure tells Tohru that Akito's allowed her to stay. Tohru accepts and she decides it's time to clean the house starting with the kitchen, which looks more like a garbage dump.
Tohru gets going on the housework and clears out the kitchen. Yuki arrives and enjoys a nice lunch. He talks about some kind of secret base which intrigues Tohru. Then Shigure and Kyo arrive. Shigure announces that Kyo's passed the high school exam for Tohru and Yuki's school, and will also be staying at the house.
Kyo's the new student in class 1-D, and all the girls are admiring him when he shouts to leave him alone and jumps out the window like a cat.