Hank: How could Kate be your daughter?
Dale: As you may recall, I learned some time ago that Joseph was conceived while I was away from Nancy, an anomaly that can only be explained by alien gene traders covertly planting my DNA into my sleeping wife.
Hank: Uh... right...
Dale: After impregnating Nancy, the aliens must have then left my genetic material with Charlene in the hopes of engineering a master race, with me as the foundation. The "how" is simple enough. It's the "why" that troubles me.