As the Upper Eastsiders prepare for a glittering Studio 54 party, Serena receives a visit from her grandmother. This causes a bit of drama because she doesn't want Charlie/Ivy's mom to be there.
Max is still trying to blackmail Charlie/Ivy and he's also trying to get closer to Serena by offering to bake a cake for the party.
Still ostracized from high society, Dan tracks down the person who posted hate comments on his site and it turns out to be someone at his publishing house that was trying to create controversy and increase sales to his book. Louis is away doing charity work, but Blair says the wedding is still on.
Nate takes the helm at the Spectator and says all scandal stories on will be verified as true before published. Immediately he has to deal with some controversy swirling around his cousin in Congress. Rumors abound his wife is cheating on him and Nate hopes to be the first to publish this story. The scoop would have been a good way to prove he's impartial, but the story turns out to be false. The representative's wife was actually creating false rumors in order to garner sympathy for her husband.
Chuck continues his self-improvement through yoga. Blair comes to him to express her fears that she brings out the mean in men and wants Chuck to help her make Louis be a good guy again. Chuck tells her about the time he left the ring on Harry Winston's doorstep.
At the Studio 54 party, everyone is dressed up in disco outfits. Serena overhears Carol and Lily having a fight about Charlie/Ivy and discovers that Charlie is also known as Ivy, same name as Max's ex. After Serena's grandmother faints, Ivy reveals that Max is blackmailing her and Max responds that's she's a phony. Max gets 86'd from the party. Then the disco dancing begins.
Chuck professes his undying love for Blair. And Charlotte, the real name of Charlie/Ivy, says she wants to be taken into the Rhodes family. Surprisingly, they comply.