Having discovered about Monica and Chandler by seeing them going at it from the window of his new apartment, Ross confronts them. He's furious at Chandler at first, mistakenly thinking the latter is taking advantage of his sister, but when he realizes that in reality the two of them are in love, his anger at them vanishes on the spot. Since he is the last of the group to discover the relationship, Chandler and Monica don't have to hide anything anymore, and they quickly become a much-discussed subject of talks in the group. Things with Monica and Chandler start to go wrong when he starts to freak out about the relationship when his friends start to make long-term-relationship jokes, such as he and Monica having kids and having Ross as brother-in-law.
The friends also get to meet Joey's new girlfriend, Katie, who's very nice and energetic - so energetic, in fact, that she keeps playfully punching Joey, who does not appreciate this because she's rather strong and keeps accidentally hurting his arm, but she thinks he's only joking when he actually tells her this (most likely because of the ridiculous way in which he does). When he decides to break up with her, he wears six sweaters on top of each other to cushion the punches, but Rachel saves him the trouble of transforming into a punchbag when, after Katie playfully punches her a few times and accidentally hurts her also, she retaliates by angrily kicking Katie's ankle, hurting Katie, who is furious and demands that Joey stick up for her. He refuses, however, hoping that she will consequently break up with him-and she does, much to his delight.
At his new apartment, Ross receives a visit from Phoebe with an assortment of house-warming gifts worthy of her fantasy. At the same time, the president of the tenants committee, Steve, greets Ross and tells him of Howard, the retiring handyman. But Ross ruins the conversation when he refuses to chip in $100 for the handyman he never even met. Steve misunderstands and gets the impression that Ross is a selfish cheapskate. He depicts Ross as this while talking about him with everyone in the apartment block, causing everyone in the building to take a dislike to Ross. Annoyed by this, he tries to organize a party for everyone to explain the reason behind the refusal, but ends up going to the party everyone's having for Howard. He's even more surprised to find Phoebe there, especially when he finds out that she chipped in the $100 and that everyone likes her. Things go even worse for him when he cuts and eats Howard's cake. Just as he's about to be kicked out of the party, Phoebe jumps in to defend Ross, but ends up criticizing and insulting her new friends, who kick her and Ross out of the party unceremoniously.
When he talks to Monica about all the jokes the friends have kept making, he reacts immaturely by trying to pass off their relationship as "casual". Monica gets angry with him and storms out, avoiding him when the two get within talking range. When he insists to talk to her, she tells him to start figuring how to solve relationship problems himself. Now in a desperate situation, Chandler tries to make up with her by taking Ross and Joey's advice of making a big gesture. What he manages to do, however, is screw up again - this time in a good but very unnatural sense - by proposing to Monica in front of everyone just to say sorry. Monica takes the relationship-problem-solving responsibilities back.