A Hollywood talent scout, needing a mechanic for his limousine, sees Fonzie at Arnold's and thinks he could be the next James Dean. The Cunninghams, Potsie, and Ralph go to Hollywood with Fonzie for his screen test.

Fonzie faces jumping a caged shark on water skis, and Richie decides whether or not he wants to sign the Paramount Pictures contract he was offered.

After Chachi is caught by a truant officer, Fonzie and Richie arrange for Joanie to tutor him. He gets caught cheating on a test and, as a result, gets suspended from school and gets in hot water with Fonzie.

Fonzie has to have his tonsils removed and will miss a big Halloween party.

Richie, Potsie, and Ralph get an apartment of their own.

Pinky Tuscadero's younger sister, Leather, comes to Milwaukee looking for a gig. Al gives her and her group a job at Arnold's after a successful audtion, but Officer Kirk threatens to shut the place down after learning of Leather's troubled past.

Fonzie is invited to a socialite dinner party, but the people who invite him do so thinking Fonzie will make a fool of himself.

Richie, Potsie, and Ralph want to join the best fraternity on campus, but they have to survive ""Hell Week"" first.

After getting a ""D"" on a paper for his investigative reporting class, Richie decides to do a story about the corrupt sanitation department that is forcing Howard to pay a weekly surcharge.

Fonzie comes to think that he is allergic to girls.

Joanie and Chachi come back to Milwaukee after spending the summer in Chicago. Joanie wants to move there to be with Chachi and to continue their music career. After telling Howard and Marion her plans, which include attending Northwestern University, Howard refuses to let her go.

Joanie and Chachi have the opportunity to appear on a television music show but learn that their format is folk. Meanwhile, Fonzie is upset that folk music seems to be replacing rock and roll.

Fonzie pledges his love to Ashley but risks losing her when he allows an old girlfriend to spend the night at his apartment. Meanwhile, Howard teaches K. C. to drive.

A record producer hears a demonstration tape of Joanie and Chachi and is eager to sign them. However, Chachi has an argument with Mario, a member of the band, and says they're breaking up.

Fonzie babysits Heather when Ashley leaves for a tax seminar, but his attention is drawn away by a televised heavyweight title fight leaving Heather resentful toward him. Meanwhile, Joanie and Chachi return to Milwaukee after Joanie says she's sick.

After deciding to quit the band, Joanie moves back in with Howard and Marion to enroll in a teaching program at the University of Wisconsin. Chachi tries to convince her to stay with him in Chicago after he isn't willing to go with her back to Milwaukee.