Niles hosts a Halloween costume party to benefit the Library Association. The guests are asked to dress as a character from literature, which prompts Bulldog to come decked out as "Waldo" from the "Where's Waldo?" children's book series.

Partying is the last thing on Roz's mind: she confides in Frasier that she thinks she might be pregnant. As the evening wears on, overheard conversations lead Niles to mistakenly believe Frasier has impregnated Daphne, which sends Niles into a jealous rage, and only further confuses Frasier, Daphne and Martin, who don't understand why Niles is behaving so strangely.

While Frasier is trying to figure out what's going on with Niles, and simultaneously flirt with a sexy woman dressed as Lady Godiva, Roz gets a phone call from her doctor, who confirms that she's pregnant -- a revelation that leaves the partygoers speechless.