Buffy and Riley are making out on her bed, but before it gets too serious, Willow barges into the room and tells them of a demon that attacked the rec room. Armed with weapons, they go to the rec room only for Buffy to discover that it's a surprise party for her 19th birthday. At the party, Giles feels out of place, especially when Buffy introduces Riley as her boyfriend, and brags about how wonderful Professor Walsh is.
Now able to hurt and kill demons, Spike packs his things as he moves out of Xander's basement. Professor Walsh is informed that Buffy is the Slayer. After revealing Riley's 17 captures and kills, she inquires about how many "hostiles" Buffy has killed. Uncomfortable, Buffy initially keeps quiet to avoid bragging, but from Buffy's conversation with Riley afterward, the viewer can infer that Buffy is forced to admit that she has killed hundreds of vampires and saved the world multiple times. Riley is impressed and intimidated. As he puts it, "I suddenly have to learn the plural of apocalypse." Meanwhile, Giles discovers that a powerful demon is about to rise, and calls Buffy, but Willow informs him that she is with Professor Walsh. Giles goes to talk with Maggie Walsh about Buffy, unaware that she knows Buffy's identity and of her position in the Initiative. He has an immediate dislike for her, and is offended when she says that Buffy lacks a father figure.
Willow and Xander go with Giles to the cemetery to find the demon. They are very late and fail to find the demon. Instead, they find the area incredibly clean, which Willow suggests is the work of the Initiative. She and Xander go on about how thorough the operation is, only to discover that Giles never knew about the Initiative or that Riley and Professor Walsh are behind it. Again feeling incredibly out of the loop and unwanted, Giles sends Willow and Xander away, offering to stay in case anything happens, but after a few seconds realizes it's utterly pointless and dejectedly leaves. Ethan Rayne walks out of the shadows, speaking of interesting things to come, only to be caught when Giles re-enters the mausoleum.
Giles prepares to beat Ethan, sparing him only with Ethan's hastily uttered promise of information. Going out for a drink, Ethan tells Giles that the underworld is being threatened by the Initiative, especially by something called 314. Whatever the Initiative is doing, it's throwing everything out of balance. Buffy and Riley spar together, both holding back at first until they decide not to. Buffy kicks Riley hard enough to send him flying across the room. Meanwhile, Giles & Ethan get very, very drunk, with Giles opening up about how left out he feels and his annoyance that the Initiative has the demons running scared when he has been fighting evil for 20 years, and Ethan flirts with their waitress and gives his number to her. Willow and Tara meet to practice magic, and a simple magical exercise to float a rose goes awry, causing the rose to fly wildly around the room.
When he wakes the next morning, Giles discovers he's been transformed into a horned demon with incredible strength. First trying to make a call, he breaks the receiver, then breaks the door off its hinges as he tries to leave the house. At breakfast, Willow lies to Buffy about where she was, saying she was practicing magic alone. She does mention that some magical force interfered with the spell she was attempting to cast. Buffy realizes she never told Giles about Riley and the Initiative. Giles goes to Xander's basement and tries to get him to help, but when Xander wakes up, he doesn't recognize and cannot understand Giles, who is speaking in a demonic language. Xander starts to throw things at him and Giles runs away.
The gang finds Giles's place destroyed, and are worried that the same demon that went to Xander was responsible for hurting or even killing Giles. Walking through the cemetery, Giles runs into Spike. Spike recognizes Giles, and identifies him as a Fyarl demon. Because he speaks the language, Spike agrees to help find Ethan and fix things, for the price of two hundred dollars. Riley shows up at Giles's apartment where everyone is researching the demon. After finding the demon in Giles's books, they determine it can only be killed with a silver object.
Spike tries to figure out how to drive Giles's car while telling Giles of his experiences with Fyarl demons. Apparently they are extremely stupid, love destroying things, and have an ability that Spike describes as 'that thing with the mucus' to spray goo that hardens like rock. Upon spotting Professor Walsh, Giles makes Spike stop the car so he can chase her down the street in return for her comments in their last conversation. Spike gets information out of the waitress that Ethan flirted with, and finds out where he lives. Breaking into the magic shop, Buffy finds a receipt for materials purchased by Ethan Rayne. Trying to escape the commando vehicles chasing after them, demon Giles jumps out of the car while the commandos continue their pursuit on Spike. Spike later crashes the car while trying to get away.
Demon Giles charges into Ethan's motel room, and attacks him. Buffy and Riley arrive on scene and while Riley takes care of Ethan, Buffy fights with demon Giles. With a letter opener she took from Giles's place, Buffy stabs the demon, but then she looks into its eyes and realizes the demon is Giles. Fortunately, the letter opener turned out not to be made of pure silver. Giles is turned back into a human and Ethan is arrested by the US Government courtesy of Riley. While Giles goes to watch Ethan get put away, Buffy and Riley talk about her abilities again. Buffy apologizes for not telling Giles about Riley and the Initiative, but Giles is worried about her safety and who she trusts. Professor Walsh is upset that Riley disobeyed orders for Buffy, but says she thinks that Buffy will "work out". Passing through security doors, Walsh enters a room labeled "314."