Point Place, Wisconsin, May 17, 1976. Nerdy teenager Eric, who smokes weed with some classmates in the basement, is in heaven when his dad Red decides to hand him the keys of his flashy Vista Cruiser, at the price of extra chores and forbidding him to take it out of town, knowing that won't be obeyed anyway. The gang, which just adopted foreign exchange student Fez, is excited about a Todd Rundgren concert- Jackie uses her female charms to make sure skirt-chaser Michael Kelso would take her too.
Eric is turning 17 and made very clear he wants no more childish 'surprise' party and a cassette player, not an outdated 8-rack player, but ma Kitty is as subtle as a herd of elephants preparing exactly what he dreaded. To make it worse, Eric's nasty sister Laurie, in college, is home and makes the gang boys' heads spin, Kelso even imagines her to be madly in love with him. Pa Red cheerfully gives Laurie the keys to his new car plus $30, Eric nothing except that damned 8-track and his usual chores, while barring the only escape route from Kitty's eternal baby-party; ...
Point Place is buzzing when it's announced that President Ford is coming to town. Meanwhile, the guys want to do something to show their opposition and decide to go streaking.
Laurie brings a friend home for Thanksgiving which could be a problem. When they arrive it turns out that Kate is hot, and Eric has a hard time controlling himself, much to Donna's concern. Meanwhile Bob offers Red a job.
When Eric scratches the Vista Cruiser Red takes it away. Luckily Kelso is able to borrow his cousin's car, or so they think... Meanwhile Donna and Jackie are starting to think more about sex and Midge begins to take feminist-classes.
This episode is Valentine's Day. Eric wants to give Donna his class ring, but Hyde wants to tell her how he feels. Eric takes Donna to a restaurant and she gets drunk. Hyde and Eric have words and come to an understanding.
Jackie tells about her pregnancy to Eric, who tells Donna, who gives the foolish girl heaps for having unsafe sex; Kelso faints overhearing them, but intends to do his duty as father. The Formans suspect correctly Laura is home because she failed at Fort Lauderdale college, hoping to fake her F's in an official letter. When Donna asks advice for her friend, Midge fears her daughter was as dumb as she at sixteen. Bob is shocked Donna ordered the pill at the pharmacy; Eric just runs out but has to face the home-front. Jackie has good and nasty news, Red handles horny ...
Eric is hoping the prom will allow him to take a next step with Donna, Hyde convinces him to take a motel-room; when they get there, it's grubby. Jackie has dumped Michael, yet wines he didn't ask her; in fact Kelso takes easy Pam Macy; Jackie now cries till Hyde takes her; on the night he notices his friends still only want each-other and makes Michael act accordingly. Fez doesn't take a girl but convinced himself his English teacher is enamored in him; the music teacher makes him star on the disco floor instead. Midge has decided she wants a job, or even better: her...
Eric, Hyde, Fez and Kelso go see Star Wars and become obsessed with it. Red's boss Milbank returns to town. Eric fights his son David, whose butt he once kicked in elementary school, for moving in on Donna.
Hyde convinced the gang it would be cool to paint a pot weed leaf on the water tower and dares Kelso to take crazy risk to fix the failure, till Michael makes a fall and badly hurts his arm, then Fez who falls but is alright. Jackie semi-nurses Kelso and makes him realize Hyde is no real friend, to little avail. When Eric seeks medical advice from his nurse mother, he gets traumatized by accidentally walking in on his parents making love. The unsavory idea even gets Laurie's sympathy, yet he rather lets h-them thinks he's on drugs then come clean until that's done ...
When Grandma Forman dies unexpectedly the Formans have to deal with the loss. Eric goes to a bar, Kitty cooks, Laurie thinks of her inheritance, and Red has to deal with his over-emotional brother.
While riding in Eric's car, Kelso has the brilliant idea to go skinny-dipping at the reservoir, but all their clothes get stolen, so the basement gang goes to the Hyde home to borrow his and his mother's clothes so they'll have something to wear. Jackie catches a cold from the reservoir, and ends up in bed. Midge's Feminist Warriors - which no other husband puts up with - keep making her crazy, yet member Sharon actually proves an old-fashioned caring housewife at heart when she finds good provider Bob feeling neglected. Red felt with the car plant about to close down...
Goodfornothing Hyde surprises everyone, even himself, responding to Kitty's maternal influence by making some efforts at study and chores, no longer 'admired' by the other boys as the perfect bad example. Eric's initial happiness with the brother he never had soon turns in frustration as Hyde constantly gets hight praise and is even set as an example for doing less and half as good, while Eric is now kid no. 3, and listens to one of Kelso's worst-advised ideas... Red's fellow Korea veteran Bull is in Point Place, showing off to him him and Bob as a success in business...