Lorelai and Sookie are walking down the street on the way to Weston's Bakery to pick up a cake for Rory's graduation party. Lorelai is stressing about all that she has to do in preparation. She gives Sookie a list of things to remember for her and Sookie devises a mnemonic device to help her remember the list. Lorelai is also worried about Logan asking her permission to marry Rory. She complains that it was just a rhetorical question and it places her in a very uncomfortable situation. She knows that he asked her permission out of respect but she decides making her wait to hear is not respectful. Every time she hears the phone ring, she thinks it must be Rory phoning her to tell her the big news. To top everything off, she is embarrassed about her serenade to Luke in front of the whole town. Sookie is so excited that she finally has said something and asks if there is really a Luke thing. Lorelai can't figure out what really happened. She doesn't know what she wants or how she feels about him. She doesn't know if what she was feeling was a new feeling or unresolved feelings of what they had before. So she is going to the diner to see how she feels without seven shots of tequila and the specter of a Whitney Houston song. Sookie tells her that she thinks that what she is feeling is real. Lorelai finds out that the town has been describing her performance at every chance.
Luke enters Liz and T.J.'s garage. They have turned it into a workspace for Liz's jewelry making business. Luke is looking for a graduation present for Rory. Liz begins talking about Lorelai's song at KC's. Liz asks Luke if he is going to respond to her love serenade. Luke dismisses the suggestion that she was singing to him and tells her he isn't going to do anything. He reasons that she drank a lot of tequila and sang a sappy song. Liz tries to impress on him that the words of the song meant something and that she is waiting for him to make a move. He argues that if it had meant something she would have said something. He chooses some teardrop earrings for Rory. When he looks at a necklace, she tells him it would look nice on Lorelai. He decides to get the necklace as a back up for Rory but it is clear that he wants to give it to Lorelai.
Paris and Doyle are packing up the apartment. While Doyle spackles the walls, Paris is selling her the furniture from the apartment. They are also planning a trip to India for the summer but Paris is planning to take books to prepare herself for first year med school. Rory walks in from a theater party with Lucy and Olivia. Rory and Paris talk excitedly about their graduation. Rory begins recording the final days at Yale by taking pictures of Paris and Doyle packing up the apartment.
Lorelai finds Patty and Babette at the counter in Luke's. They begin to talk excitedly about her song to Luke. Lorelai is embarrassed and tells them it was really nothing; that it was just a drunken karaoke moment. Luke enters in time to hear her denial and seems hurt. To Lorelai's surprise and confusion, he is very abrupt with her. Patty and Babette ask about going to the graduation but Lorelai isn't sure she will be able to get tickets for them. Lorelai's cell phone rings. It is Rory telling her she won't believe her news. Lorelai pauses to brace herself, thinking that Rory is going to tell her about a proposal but instead she excitedly tells Lorelai that Milan Kundera is speaking at the graduation. She asks Rory if she can get more graduation tickets since the whole town wants to attend. Rory is charmed by the request but explains that they only get four tickets per grad. Rory asks if she is nervous about seeing Chris, but Lorelai tells her that they had a good talk and all is well. Rory asks about Luke. Lorelai tells her that she went into the diner to figure out how she feels but Luke totally ignored her. She thinks that she not only completely embarrassed herself but she also embarrassed him.
Taylor is holding the town meeting in a wheel chair with his leg in a cast after having slipped in the tub. Lorelai is asked how they get tickets for Rory's grad but she tells them there are only four tickets per graduate. Lorelai promises them that they can see her at the party at her house. They decide that Lorelai's house is too small for the whole town and that they will use the town square for Rory's graduation party. They tell Lorelai to take lots of pictures for the graduation re-enactment.
At Emily and Richard's graduation party, Rory is standing and talking to some women from the DAR. They are telling her that they would love to have her back. Chris calls Lorelai on the phone so that their first meeting since the divorce isn't a public event. Lorelai tells Chris that Logan asked permission to marry Rory. Chris is a bit wistful when he comments that normally it is the father that gives permission. He sadly notes that he has missed so much. When they return to the party, Emily and Richard sing a song to the happy graduate. Rory gives a speech thanking her grandparents for everything. Logan decides to take this opportunity to propose to Rory. Rory is left speechless. She takes Logan outside so that they may talk in private.
Logan tells Rory that he got the job in Palo Alto. Rory tells him that it is a very big step and he has had a long time to think about and she needs time to think about it as well. Logan leaves and Rory calls her mother out. They take a ride in the horse driven cart. She tells Lorelai that she just couldn't answer him. Rory asks her mom what she should do. She tells Rory to think about it for a few days and then make the decision. As Rory thinks it through aloud she decides that she is very young and there shouldn't be any rush to get married. Rory begs her mother to tell her what to do but Lorelai tells her that she can't; it is her decision.
Lorelai is walking slowly through town. She greets Kirk who is in a Lucite box above the town square doing his performance piece. Luke brings out a garbage bag. When he sees Lorelai he asks her how she is doing but there is a coolness in the query. Lorelai tells him she was just taking a walk to clear her head. He asks Lorelai what she is clearing her head about…
Lorela: (She sighs) Logan proposed to Rory.
Luke: No way! Wow…well I guess you would need a walk for that…huh, what'd she say?
Lorelai: Well…she said she needed time to mull it over.
Luke: Good answer.
Lorelai: I thought so. (Lorelai nods her head in assent)
Luke: yeah…so uh…she ask for your advice?
Lorelai: She did yeah.
Lorelai: I told her it was her decision. My mother's picking out china patterns.
Luke: Oh, I bet she's all over that. So you're leaning toward no?
(The tone of there conversation makes a distinct change. It's unclear as to whether they are talking about Rory and Logan or themselves)
Lorelai: Oh…uh…no. I'm not really leaning. I'm kinda upright.
Luke: Well…well, I just…I can understand if you were leaning away from yes.
Luke: Well I mean she's…really young…It is the most important decision of your life…uh you know…her life.
Lorelai: Well, they love each other. He's been great. Maybe they got it together young. Some people do.
Luke: Right. Others need time.
Lorelai: (Pointedly) Sure…or they're never ready.
Luke: Well, I wouldn't say, never…just wanna be…a little more careful…they're a little slower…you know, just to make sure it's…(with emphasis) right.
Lorelai: Well you can't always be a 100% sure it's right, sometimes you just have to take a leap of faith.
Luke: Well you gotta know what you are leaping into.
Lorelai: After all this time, how could you not know?
Luke: How could who not know?
Lorelai tells him her walk is done. Luke asks her to wait, he has something to give her. He goes into the diner to get the present for Rory. He looks wistfully at the box with the necklace. He goes out and hands Rory's present to Lorelai. They are a bit formal when they say good-bye.
The next day, Lorelai and her parents are walking towards the graduation. Emily is complaining that Milan Kundera is a rather dull speaker to have for such an occasion. Emily can't understand why Rory hasn't said yes to Logan yet. Lorelai tells her that she is thinking about it. Of course, Emily doesn't know what there is to think about.
Rory, Paris, Lucy and Olivia are reminiscing and celebrating over a bottle of champagne. They chat about their graduation parties. They head off to get their diplomas.
Emily is still trying to get Lorelai to tell her what Rory is going to do. Lorelai explains that she is going to let her make her own decision
As they line up, Paris is wondering what to say when she receives her diploma. Paris suggests their journey together is finished, but Rory tells her they haven't been able to shake each other since high school. They will be friends for a very long time. Paris hugs Rory. Logan waves to her from the lawn.
Reminiscent of her high school grad, Emily complains about their seats. She also continues to obsess on why Rory couldn't say yes to the proposal. Richard tries to quell Emily's complaints and encourages Lorelai to enjoy her daughter's graduation from Yale as it is as much her moment as Rory's. As Rory crosses the stage to receive her diploma, Lorelai stands up and cheers for her daughter. They look at each other with great meaning and emotion. While they celebrate, they take pictures of the grad with all members of the attending family. As they finish the pictures, Rory sees Logan and goes over to speak to him.
Rory and Logan begin with small talk. He congratulates her and reminisces about his grad. Rory gets very serious…
Rory: (Sadly, seriously) Logan…I'm sorry…I can't. I love you. You know how much I love you. I love the idea of being married to you. But…there's…a lot of things right now in my life that are undecided 'n…that use to scare me but now I…I kind of like the idea that it's just kind of…wide open. And if I married you, it just wouldn't be.
Logan: So what…I go to San Francisco, you stay in the east and we see each other occasionally.
Rory: Well we can try long distance. We've done it before.
Logan: You really think that's gonna work?
Rory: I think it would be hard, but…
Logan: (Looks up in frustration) I don't wanna do that, Rory, I don't want to go backwards. If we can't take the next step…(He shrugs.)
Logan: I mean…
Rory: Does it have to be all or nothing?
Logan: (Looks at her sadly) Yeah, it does.
Rory: But…we could at least try.
Logan: (He shakes his head, resigned.) What's the point?
(Rory reaches into her pocket and pulls out the ring box. She sadly hands it to Logan.)
Logan: Good-bye Rory.
Rory watches as he walks away.
In the apartment, Rory and Lorelai are moving the last of the boxes. Lorelai complains that she is exhausted. Lorelai asks how she is doing. She misses Logan already and feels the break up has marred the happiness of her graduation. Lorelai tells her that she thinks she made the right decision. She explains that someday she'll meet the right person and she won't want to hesitate. As Rory takes the last box, she looks back at the apartment with nostalgia.