In 1985 on Halloween, Henry visits the local asylum to save a girl named Sherry from jumping to her death; he leaves Shawn and Gus in the car and tells them not to look or listen. Shawn does look, however; he sees the girl on the window ledge, and later she is gone.
In the present, a sorority pledge named Doreen falls to her death when her hazing, which takes place in the same asylum, goes horrifically awry. Now, the rest of the sorority sisters are being terrorized by something vengeful.
Juliet gets to go undercover as one of the sisters, while Shawn and Gus are hired for some additional help. One of the sisters, Bianca, is particularly upset when her cat alarm clock explodes. Gus and Shawn uncover that Bianca was the girl dressed as Sherry that scared Doreen right before she fell to her death, thanks to a broken window latch. Unfortunately, they realize this a little too late; Bianca, while bathing, gets a toaster dropped into the tub with her, and is killed.
Jules, Shawn, and Gus all try to get some leeway with Doreen's surviving friend, Alice Bundy. However, Miss Bundy's attitude and coldness give them the impression that she might be a tough nut to crack. Meaning well, Juliet goes to a candlelight vigil for Doreen that turns into an attack by Alice on the undercover cop. Luckily, Jules' skills and Shawn and Gus's combined forethought all save the day.
In the meantime, Lassiter gets to train a rookie who turns out not to be so young or agile named "Gooch." Gooch is opinionated, impulsive, and pretty negative, so when Lassiter goes to the Chief and asks that she be reassigned, the Chief admits surprise that the pairing didn't work out.
Season one concludes with Lassy wistfully looking at Jules, Shawn and Gus as though he would like to be included in their group.