David Brent receives news that his part of Wernham Hogg might be shut down, but tells his employees that no one will lose their jobs in an effort to stay on their good sides. In an attempt at comedy, he tells Dawn that she will, however, lose her job because of her constant Post-It notes theft, but Dawn takes him seriously.
When an embarassing doctored picture shows up in the office, David turns to Gareth to discover the villain. David lies to the visitor from head office by creating a fictional employee that he fired.
Ricky and Tim battle David and Finchy for office knowledge supremacy, with Gareth controlling the quiz match. Tim celebrates his 30th birthday.
Tim sees an opening with Dawn when she runs into trouble with Lee. Staff training goes awry when Gareth annouces his biggest fantasy and David pulls out his guitar to reveal his "musical talent" Tim quits, returns to ask out Dawn, but is rebuffed when she informs him that she and Lee have worked out their troubles.
David hires a new secretary, Karen, and proceeds to mess things up with her. Gareth has a good bit of luck landing women, until one's husband ask to join in on the fun. Donna confesses that her new beau if Ricky.
David is offered a carrot if he'll sacrifice his branch and he accepts. Ultimately, the higher position is turned down. Malcolm finds out that David failed a medical test and had to pass on the position. Tim puts his Psychology studies on hold when he's offer an extra five hundred pounds annually.