Back at SBPD, they find out that Herb withdrew 50 thousand dollars before he was murdered – which doesn't bode well for him considering a bag of drugs was just found in his locker. Peters and Boone take off, and Shawn and Gus realize that they swiped a book of matches from the evidence lot. As a result, Shawn and Gus decide to tail Peters and Boone. When the two teams converge, Shawn and Gus convince Peters and Boone to let them in on the clue they stole from evidence. Peters and Boone show them the evidence: a book of matches that says, "The Dollhouse." A hot local nightclub.
Later, at the club, they find out that Herb had been there many times to visit one of the nightclub's employees, Saralyn – who's known in the club for liking to hustle cash. Just then, they get a call from Juliet telling them that a man named Otto, a man involved in drug deals, owns The Dollhouse. Jules realizes they are already at the nightclub and warns them not to mess with Otto. Naturally, the four don't listen and break into Otto's office. They find a gun with a serial number scratched off of it – just like the one they found on the scene of herb's murder. They also find the same type of black bag that was in Herb's locker. Just then, they spot Otto and his men. They get involved in a chase. The four narrowly escape, only to rush out of the club to find that Otto has been shot and killed.
Back at SBPD, the four are in trouble for going to The Dollhouse before the police, and are especially in trouble for possibly propelling the murder of the department's only suspect. Chief Vick wants to know what they found in Otto's office, but the four do not reveal anything. As a result, Vick fires them off the case. But Gus and Shawn realize that Peters and Boone were not letting Chief Vick know exactly what they found in Otto's office – that in fact, Peters and Boone did take a piece of evidence from Otto's office: a booklet containing a stack of Dollhouse job applications. From this new piece of evidence, Shawn discovers that Saralyn put Herb as her emergency contact on her job application. This intrigues the four guys and they decide to rejoin the case despite Vick's order to stay away.
They head to Saralyn's house. They are greeted by a young woman – who is not Saralyn. The woman lets them in the house, and they immediately ask her about Saralyn's involvement. The woman lets the four know that when she worked for Otto at The Dollhouse, he had her do "drops" at a place called "Pacific Treasures" to make extra cash on the side. She explains that the only way out of the job was to pass the job along to someone new – that new person happened to be Saralyn. Shawn puts two clues together, and lets the group know that Saralyn was seen "working" at Pacific Treasures – a place directly across the way from Herb's bait and tackle shop. Shawn remembers from Herb's house a picture of Herb and another young girl, his daughter, who looks exactly like Saralyn does. And because he saw Saralyn as his own daughter practically, Herb was trying to protect Saralyn from Otto and the drug lords – which explains the bag of drugs in the locker, and why he withdrew 50 thousand dollars from his bank account. He was trying to buy Saralyn's freedom. Shawn, Gus, Peters, and Boone find Saralyn at Herb's house and try to convince her that she needs help. But Saralyn tells them to go away because everyone who has helped her in the past has been killed. After Saralyn turns the four away, we see that she is not alone in the house – a man is there with a gun pointed at her head. The man is Randy – the drug lord who hired Otto who hired Saralyn. In an attempt to save her, the four try a Peters and Boone technique called the "Bark n Mark". Shawn and Gus make a distraction by barking like dogs, while the other two save the girl. The Bark n Mark works, and Lassie and Juliet are able to take down Herb's murderer and save Saralyn.
In the end, Peters, Boone, Shawn and Gus discover a mutual respect for each other and each of their unconventional detective styles, despite their initial perception.