The Narrator puts up "Wanted" posters of Josh all over Schmicago and catches us up on the plot so far.

Melissa rushes into Bobby's office with Elsie's datebook, asking about the address and if she should go there. Bobby informs Melissa that Josh has escaped but assures her that she'll find him.

Melissa starts to cry. Bobby comforts her, suggesting Melissa follows the clue in Elsie's datebook.

Josh wakes up to hippies offering him juice, beads, and flowers. He finds himself dressed in hippie garb, and he even has hair! Topher appears, welcoming Josh to the hippie commune.

Josh asks if they are safe or if the cops are after them. Topher says the cops are always after them. Josh expresses concern that he is worse off now as breaking out of jail makes him look guilty.

Topher asks him if he feels burdened, and Josh admits that life and work have been hard. The hippies sing him a song about getting naked.

The Narrator welcomes us to Quick Street, the "seedier" part of Schmicago. Melissa walks the streets, looking for the address in Elsie's datebook.

Melissa sees the woman who was Mildred Layton in Schmigadoon chastising orphans.

Melissa says hello. The woman, Miss Codwell, tries to sell Melissa some of the orphans (through song). Melissa says she's trying to get to 17 Quick Street.

Codwell says it's where the butcher, Blight, lives, and makes suggestive comments about said butcher. Codwell points the shop out to Melissa but warns her not to try anything with Blight. Codwell laughs it off as a joke. Melissa laughs.

Topher paints a smiley face on Josh's cheek, welcoming him into the tribe. Josh is appreciative but not really into it. Topher assures him that it's not all about free love -- they also protest Octavius Kratt and his "evil" power company.

They have been getting naked and telling parables for months, but nothing has worked. Josh says maybe there's a better way to fight the power.

Topher responds with a parable -- "The Lamb Without A Flock." Using a sheet and shadow puppetry, the hippies tell Josh the story of a lonely lamb, a kind shepherd, and a cruel shepherd.

The kind shepherd takes the lamb to a new flock, where he finds a new life. Josh hates it but gives them positive feedback.

Josh insists he needs to get Melissa. Topher says that would be dangerous, but orders one of the tribe members, Alex, to find Melissa and tell her the good news. Alex heads off, and Topher suggests they all get naked again.

In Blight's butcher shop, Blight grinds meat. (Blight was the mayor in Schmigadoon). Melissa enters. He offers her some terrible meat. She declines and introduces herself, explaining that Elsie is dead, but this address is in her datebook.

Blight is saddened to learn Elsie is dead. He says Elsie was his daughter's roommate -- Melissa discerns that Jenny is Blight's daughter.

Blight says Elsie was kind and would occasionally tell him how Jenny was doing. Melissa asks why he couldn't check on Jenny himself, but he's vague about it.

Blight sings about a butcher and a wife and daughter, and the rich man who took them from him, killed the wife when she refused his advances, then imprisoned the butcher for it. When Jenny came of age, she became a performer.

Blight says the rich man will pay, and he intends his revenge by killing them all. Blight chops the meat ominously.

Melissa guesses that the rich man is Octavius Kratt, and Blight confirms it. Melissa realizes that if Kratt killed Blight's wife, he probably killed Elsie, too -- he was at the club.

Melissa goes to tell the police, but Blight says Kratt has the police in his pocket, which is why he intends to use his cleaver to dispense justice. Melissa suggests that, before jumping to kill them all, maybe Blight should reach out to Jenny and tell her the truth.

Blight says he couldn't bear the rejection -- Jenny doesn't know he's out of prison and back in town, and he says pointedly to Melissa that Jenny must never know. Melissa concedes and says she'll keep an eye on Jenny for him.

Alex enters the shop (on roller skates) and informs Melissa that Josh is safe. Melissa wants Alex to take her to him, but Alex leaves on her rollerskates. Melissa goes after her.

Topher breaks bread, and they drink wine. Josh gets high from what's in the bread.

Melissa shows up. Josh is very high. She is happy to see him but also asks him what he was thinking, breaking out of jail. He said he got caught up in the moment -- hippies can be very persuasive.

Melissa says she's been trying to solve the case, and he assures her he understands what's at stake.

Josh introduces Melissa to the hippies. They think she's a square, even when she removes her bra and throws it in the fire.

Melissa explains that she came to get Josh so he can turn himself back in to the police and go on trial tomorrow. The hippies are disappointed. Topher and Josh hug, and Josh bids them goodbye. Josh and Melissa leave.

In court the next day, the talk amongst the crowd is that Josh is guilty.

Bobby makes a dramatic entrance on a swing from the ceiling in a sparkling bodysuit. She approaches the bench, Fosse-style, and sings a song that explains all you need are bells and whistles in a court case to get the defendant off.

Bobby tap dances, cartwheels, patters, plays the saxophone, swings on a swing, and does sleight of hand.

The jury pronounces Josh (unanimously) not guilty. Melissa and Josh realize this is their happy ending and rush out. The Narrator side-eyes the camera as if to say this is not the case.

Kratt chastises his lackeys, reminding them they promised they could frame Josh but failed. Kratt laments that he always wants the women that don't want him and has trouble finding a wife. He whips himself.

The Narrator hands him binoculars, and Kratt looks out the window. Kratt spies Josh and Melissa with their backpacks, leaving Schmicago. Kratt decides to make Melissa his wife.