Someone is spreading rumors about Blair and Jenny, but who?
Jenny is busy lying to her dad about a party that she's planning, but he saw the website for her shindig and knows what she's up to. He decides to think about things before confronting her.
Eric wants to know why Jenny hasn't been returning his calls. Jenny thinks he's jealous of Asher and is flattered E has a crush on her.
Unfortunately, she's already madly in love with Asher.
Across town, Georgina, under her fake name Sarah, has become pals with Dan (Penn Badgley) and Vanessa. She mentions that she would just love to meet Serena, who she's, like, totally never met before in her life.
Dan runs the idea by S, but she's too busy studying to take her SATs. They plan a big dinner for the next night instead. As Dan walks out of the school, he sees Asher making out with... somebody. Male.
Rufus turns to none other than Lily for advice about Jenny (Taylor Momsen). He knows she's been lying, but Lily (Kelly Rutherford) tells him that she'll come back to him soon. The meeting turns awkward as Rufus sees Lily try on her wedding dress.
Dan decides to confront Asher with the news that he saw him making out with a guy, but Asher gets all defensive and homophobic. Jenny interrupts and immediately takes her boyfriend's side.
Dan asks Blair (Leighton Meester) and Serena for some advice, and B tells her that Jenny's only gonna believe the scandal if she hears it straight from Gossip Girl. Soon enough, everyone in school knows that Asher was caught making out with a guy. Gossip is great, but Blair is determined to get some evidence. Photo evidence.
Blair's girls steal Asher's (Jesse Swenson) phone and forward all of his incoming e-mails to Blair's inbox. Jenny is feeling awkward about her boyfriend's possible homosexuality. She confronts him, and he tells her that he's only dating her so she'll look good in front of her friends.
In case there aren't enough scandals in this episode, Serena (Blake Lively) receives a video full of debauchery from Georgina. In the video, we hear G telling some guy to set a camera up, and then it sounds like a (gulp) threesome going on.
What the heck did our girl do?
Gossip Girl then has more news:
Jenny apparently lost her virginity to Asher. Dan is furious, but Jenny explains that it's a lie concocted to cover up the gay rumors. Later, Jenny tries to leave for her party, but Rufus (Matthew Settle) tells her he knows she's been lying to him.
He tries to keep her from going, but she takes off anyway. Uh oh.
At an dinner with the van der Woodsens that she showed up unannounced for, Georgina throws Eric out of the closet and tells Serena and Lily that she saw him making out with a guy. Eric admits to it by refusing to deny it, and Lily is shocked by the news.
Serena tells Eric (Connor Paolo) that she'll be there for him no matter what, and E admits that he met Asher at the Ostroff Clinic.
Then, Serena meets up with Dan and "Sarah." S quickly sends Dan for a cup of coffee, then asks G what the hell she's up to. Apparently Serena didn't even know the sex tape existed. Georgina threatens to show it to Dan if S doesn't remain on "her best behavior." OMG!
Not only is Eric crashing Asher's party, but B is too. She gives Asher his cell phone back and tells him that she knows his secret.
That's when Eric steps up, admits he's gay, and tells everyone at the party that he was the one making out with Asher. Blair quickly sends the e-mail proof over to Gossip Girl, and soon Jenny's friends turn on her.
Lily apologizes to Eric for her reaction earlier. She admits she's scared and wants to protect him, and they share a nice moment together.
Jenny and Blair talk, and J admits B won the social war. Jenny no longer wants to lie to family and friends. Ending up like Blair Waldorf just isn't worth it.
Dan and Serena are having another argument, all due to S' refusal to tell the truth. She tries to convince him "Sarah" is untrustworthy, but he thinks she's nuts since she just met her.
After Dan takes off, Georgina (Michelle Trachtenberg) admits that she just wants to be friends with Serena again. It isn't long, of course, before she's talking of blackmail and destruction yet again.
Jenny returns home in tears, having broken her dad's trust and lied many times, but he forgives her anyway. Across town, Serena can't take it any longer and finally tells Blair her big secret: she killed somebody.
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