Chuck tells Dan that they're from different worlds, and that Dan, by virtue of his middle-class stature, can't afford (in so many ways) to get suspended or expelled. Chuck, by contrast, can simply have his dad buy his way out of trouble.
Despite the efforts of Serena's evil grandmother, Dan sticks it out and wins the affections of Serena at the ball. It helped that Lily stood up for him - and herself - by swallowing her pride and admitting she'd been unfair.
Rita: Luckily, Robin was working with me in New York this week and able to bring along a very special video of Blair. Tiffany: What is it? Penelope: A Jack Bass sex tape? Tiffany: A Nelly Yuki snuff film?