In Acapulco, Frasier has a torrid affair with a model named Kelly. Since she's going through a divorce, she asks him to keep their relationship a secret, and he promises. Back in Seattle, though, he is needled when everyone takes his 'discretion' to mean that he struck out and can't admit it. Indignantly, he reveals the truth about Kelly to Martin, Niles, and Daphne. When they believe that he's concocted an 'imaginary friend' out of loneliness, he goes to increasingly insane lengths to prove it.