Kotter refuses to help Barbarino study for his test that would promote him to the eleventh grade. So the Sweathogs make a deal with Kotter. If he helps Barbarino study, they will help Julie and the babies.

Horshack joins a religious cult and decides to drop out of school to go live with with the cult members. But before he leaves, the Sweathogs pull him into the school bathroom and try to deprogram him.

The Kotters are looking for a new apartment and having no luck. Juan has an answer to their problem. His Uncle owns a building in a good neighborhood at the right price. The gang helps the Kotters move in and everything seems to be going great...until Moe Epstein tells them that there are no babies allowed.