In the Forman basement, Jackie comes in with an advance copy of the yearbook, and says that she has good news: 1977 is her cutest year ever; Eric says that he thought that last year was cutest, and Kelso tells her that she's cuter than ever; Jackie points out that she's cuter because she dumped him. She sits down beside Hyde and asks if he wants to eat popcorn and look through the yearbook; Hyde says that would be hell. Jackie starts flipping through the yearbook; Fez says that it's his first American yearbook. Jackie starts pointing out all the pictures that she's in; Fez can't find any that he's in. Eric sees someone mooning the camera in one of Jackie's cheer leading pictures, then notices that it's a girl doing it, and wishes that they had a magnifying glass so they could see the person better; Kelso pulls a magnifying glass out of his pocket and says he was looking at insects. They take a closer look at the picture; Eric is horrified when he realizes that it's Donna's butt in the picture; the gang looks at her and she laughs and nods.
[Scene change: Eric falls away from the camera; Donna jumps in the air.]
In the Forman basement, Eric is stunned, Donna tells him that he looks weird, and Kelso says that it could be because of his girlfriend's naked butt. Donna says that it's no big deal, but Jackie is upset as well, saying that Donna ruined her cheer leading picture with her nasty butt. Fez is also upset, because there are no pictures of him in the yearbook; he blames it on whitey trying to keep him down. Eric grabs the yearbook from Hyde and Kelso, asking Donna how she could do that, saying that it's not something that you just do.
[Scene change: Fez dances on the screen.]
On the Forman front porch, Jackie tells Donna that Kelso is a boy and doesn't know what he wants, but Hyde does, and that he's the sweetest, cutest boy she's ever met. Donna points out that Jackie used to hate Hyde; Jackie explains that things change, like how she used to hate Donna when they first met. Donna looks a little hurt, and so tells Jackie that she used to hate her too when they first met; Jackie says that that's because Donna was such a goon. Donna calls Jackie a bitch, and Jackie calls her a goon again. They go back and forth calling each other names, then Jackie says that she has to go find Hyde.
In the Forman driveway, Red and Kitty take groceries from the car; Midge and Bob come over dressed the same; Midge explains that they were jogging. Kitty asks if they're still on for cards tomorrow and Bob starts to make excuses; Red interrupts and says that no excuses are necessary, then adds sarcastically that he's sad that they won't be able to get together, and has to go inside. Bob leaves as well; Kitty asks Midge what's wrong with Bob; Midge explains that he's uncomfortable talking to them now that Eric and Donna "know" each other, if Kitty "knows" what she means. Midge proudly tells Kitty that she was making a pun; Kitty laughs and after Midge leaves, Kitty mutters that both Bob and Midge are crazy.
At the Fotohut, Jackie tells Leo that there are lots of things that she likes about Hyde that she didn't like before, and gives him lots of details that he's not really listening to; Hyde comes in and asks what Jackie is doing there. Leo tells Hyde that he thinks Jackie is hitting on him, and asks Hyde to make her go away. Jackie informs him that she's not hitting on him, and calls him a relic; he tells her that name-calling is no way to win someone's heart. They start asking each other "what are you talking about?" and while they're doing that, Hyde leaves. Jackie realizes that he's gone and runs out after him, and Leo comments that he still doesn't know what she's talking about.
In the Forman basement, in the circle, Hyde says he doesn't know what's with Jackie, and his life is living hell; Jackie laughs and says he's teasing, because that's what best friends do. Donna tells them that she likes showing her butt and shaking it; Laurie says that she respects that, but Donna has to be careful or else people will call her a home-wrecker, then adds that she can count the number of homes she's wrecked on one hand. Hyde tells them that no one will label them here, and that they're all welcome to take off their clothes and shake any body parts that they want to shake, but adds to Jackie, "Not you." Jackie tells Laurie that she wouldn't call her a home-wrecker, but she would call her a slut. Donna shakes her butt.
In the Forman kitchen, Kitty is cleaning; Red comes in and tells her to smile, since they don't have to play cards with the "looney tunes." Kitty tells him that she's having Bob and Midge over to clear the air; Red doesn't want to do that, telling her that this is their chance to grow apart from the Pinciottis, and he doesn't want Kitty to throw away that chance. Kitty tells him that she has to stare at his sour puss six days a week, and even God got one day off; she laughs and leaves.
At The Hub, Donna comes in and sits with Eric, who tells her that the yearbooks have come out and no one seems to have noticed her butt, so there's nothing to worry about. She sarcastically says that she was worried and couldn't sleep last night because she was thinking about it. Eric comments that the picture was small and out of focus, so it's likely that no one knows it was her; Timmy comes running in and jumps up on a chair holding a yearbook and shouts, "Hey everybody! Donna showed her ass! Donna showed her ass!"
[Scene change: Donna jumps in the air.]
In the Forman kitchen, Kitty tells Bob and Midge that they've been friends and neighbors for a long time, and that they need to talk; Bob says no, they don't and Red agrees, saying that if Kitty pushes Bob, he might just get up and leave, then tells Bob that he'd respect him if he did that. Kitty says that Donna and Eric are having sex; Red is uncomfortable and says that he didn't know this was going to be a sex-talk; Midge laughs and says that she did, and she thought it might be fun, and it is. Kitty tells them that it's good to clear the air, and that keeping secrets causes cancer. Bob informs her that he'd rather have cancer than talk about this; Red agrees, saying, "Deal, buddy." Bob thinks that Red means that they have a deal, and reaches over to shake Red's hand, but Red just hands him the cards, and explains that he wants Bob to deal the cards.
At The Hub, Fez and Kelso are playing Foosball against Leo and another guy; Fez tells Leo to go cry to his white momma because he and Kelso are going to beat them; Leo says that he's pretty sure he's Chinese, then tells them to put their money where their mouths are, and wants to bet $20 on the game. Kelso checks his wallet and says that this is going to cut into his baby-sitting money, then changes that to his drag racing money. They start the game and Leo scores a goal immediately, then laughs and says that he just remembered that he's really good at this. Jackie comes in and sits at the table where Hyde is reading Mad Magazine; she tells him that she signed them up for roller disco and the lesson starts in 30 minutes so they have to hustle. He just looks at her, so she explains that she was making a joke; he tells her that he got it, but that he doesn't roller disco on Friday nights; he usually goes out and punches people who ~do~ roller disco in the head. Jackie tells him that they can do anything that he wants; he tells her that they have nothing in common; she's a cheer leader, a square, so she should roller disco out of here. Jackie stands up and tells him that he thinks he knows her, but he doesn't; as she leaves, Hyde comments that he knows she likes unicorns.
In the Forman driveway, Eric is shooting hoops alone; Donna comes over, and Eric yells for the news cameras, because Donna has her pants on. She asks what his problem is; he tells her that the problem is her butt... our butt. Donna informs him that it's her butt and she can do what she wants with it, and it was funny, adding that he should be glad that he has a girlfriend who's cool enough to moon a camera. Eric tells her that when the jocks see the picture, they're all going to want her; she sarcastically says that with her weak, girlie mind, she'll go for them, then calls Eric a bonehead. Eric laughs, but then suggests that in the future, she show a smidgen of modesty; Donna laughs at him and calls him a prude. Eric denies this, but Donna keeps laughing at him and telling him that he's like an uptight little Pilgrim.
In the Forman kitchen, Bob and Midge are getting ready to leave; Bob says that he's glad that Donna is with Eric, as he's not a degenerate.
In the Forman driveway, Eric moons Donna. At the kitchen door, Kitty, Red, Bob and Midge stand and stare at him in shock; Kitty says his name, and Eric looks through his legs and sees them all standing there. Donna falls down laughing. Red asks Bob if he wants to cancel next week's card game.
At The Hub, Kelso tells Fez to channel his hatred for the white man into this one last shot. Just as Kelso drops the ball into play, Timmy comes over with his yearbook and asks Fez if he'll sign his picture. Fez looks and sees that half of his face is in a picture, and immediately decides that he loves the white man again, and he's willing to forfeit the game. Kelso says no, Fez needs to kick some racist ass, and continues playing, but Fez isn't paying attention, he's looking at his picture in the yearbook and waving at it. Leo scores another goal and wins the game; Fez tells him, "Nice game, white friends."
In an alley, Jackie is waiting; Hyde comes around the corner and she tells him that she's not a square cheer leader and holds up a bag, saying that she's on the wrong side of the law. He isn't impressed by the bag, until she shows him what's inside it; she tells him that it's hers, and she bought it in the ghetto. Hyde points out that there is no ghetto in Point Place, just that one house that needs to be painted. Jackie tells him that she wants to be with him because he's the coolest, sweetest guy; he grabs the bag from her and throws it onto the hood of a nearby car. They start to argue; a police officer comes over and asks if there's a problem? Hyde says that there isn't; Jackie blurts out, "Don't look in the bag!" The officer looks in the bag and tells Jackie that he's going to arrest her; she says that she has to cheer tomorrow, so she can't be arrested. Hyde tells the officer that it's his bag; the officer doesn't really believe him, but Hyde tells him to think about it: a cheer leader or a punk? The officer then arrests Hyde; Jackie tells him that they're more than friends now, and she loves him. Hyde tells her to shut up as the officer leads him away in handcuffs; Jackie says that she'll wait for him.
In the Forman kitchen, Kitty tells Eric that Bob will never recover from sight of his rear end, Laurie laughs and asks, "What rear end?" Red laughs as well, and asks Eric how he expected to run away with his pants around his ankles? The phone rings; Red answers and tells Hyde what happened with Eric. At the police station with the officer standing by him, Hyde laughs, then says he has something to tell Red. In the kitchen, Red listens, and asks what Hyde was arrested for, then asks "Possession of what?" When he gets the answer, he shouts, "Son of a bitch!"
In the Forman basement, Kelso asks what Hyde got arrested for; Donna says "Holding" and Kelso asks what he was holding. Jackie says it was her heart, and she loves Hyde. They all stare at her and in unison, ask "WHAT?" Jackie continues, saying that some day, Hyde will cut off his stupid sideburns and they'll live happily ever after. The rest of the gang is still in shock, and again, they all ask in unison, "WHAT?"
[End credits: In the Forman basement, shots of the butts of the cast, shaking to disco music.]