New workers from Swindon join the Slough work force. Rachel raises the attentions of Tim and Gareth. David is reprimanded for poor choices in humor. Tim performs a dance for Dawn, but it is physically interrupted by Lee.
When the staff are examined, their true dreams are revealed. David is upset to realize that everyone prefers Neil to him. Rachel shows feelings for Tim. David tries to win support through a lunch break drinking session, but he's the only attendee. He gets drunk and harasses Dawn with some of his poetry.
Trudy receives the traditional office gift of sex toys for her birthday. David is unable to impress Neil with his new strategy, but his spirits are brightened when he's sought after by a public speaking company. Rachel and Tim continue to click and it continues to bother Dawn.
Gareth is shocked to suppose that Rachel and Tim have consumated their relations. Gareth makes fast friends with Simon, the computer guy. David is saddened to learn that he has been given awful nicknames by the staff.
Comic Relief Day finds the office in good humor. David's attempt to outdo Neil and Rachel's Saturday Night Fever dance moves is unsurprisingly inept. Dawn raises money by selling kisses and her lips finally meet Tim's. David is told that he is going to lose his job.
David's secret hope that his termination would have an effect on his employees is squashed by reality. Tim and Dawn's shared kiss inspires Tim to stop seeing Rachel and tell Dawn of his feelings for her. David begs for his job.