Shawn Spencer hails from a family of cops, and was fully expected to carry the torch by his father, Henry, who meticulously schooled his son from a very young age in the finer points of detective work. But while Henry made him a detective, he can't make Shawn be a detective.
A man is chumming the waters off of a boat at night, when a shark jumps out and latches onto his arm, dragging him into the sea. The next morning, Lassiter and Juliet are at the beach where the body of what appears to be a shark attack victim has washed ashore. Lassiter thinks he sees what might be a knife wound among the shark bites. He sees Shawn and Gus approach, and, determined not to be outdone this time, beats Shawn to the punch, claiming to the press that the victim was murdered.
Shawn is wrapping up a case at a pizza parlor, breaking it down for Vick, Lassiter and Juliet in front of the suspects and a room full of witnesses, when Henry rushes in and quietly tells Shawn he's got the wrong guy. Shawn realizes Henry is right, and must switch suspects mid-stream. Vick overhears Henry talking to Shawn about how much his son comes to him for advice, but she's not the only one there interested in Shawn.
Donny Lieberman, a courier for service that caters to biomedical companies, comes to Shawn and Gus for help. He got very drunk the night before and when he woke up this morning, a cooler he was transporting for GenuTech was missing. It contained the deadly Thornburg virus, whose symptoms include headache, weakness, and bleeding from the eyes. He also says he is missing an antique gold watch. At that same time, a blonde woman stumbles around a convenience store, then starts bleeding from the eyes before she falls down dead.
Juliet goes to the train station to meet Scott Seaver, her college boyfriend. They had planned to meet there exactly seven years after they said goodbye, but he never shows up. At first dejected, she quickly becomes curious as to why he didn't show. She starts to use police resources to track him down, but Vick puts a stop to that before she can find anything. She sees Gus in the station, and asks for his help - but he must keep Shawn out of it. With everything that's happened between them, it would be weird.
Gus has a secret girlfriend that he has been keeping from Shawn but is finally ready to introduce him to Ruby. Shawn’s first impression of her is a good one, but he insists on meeting her friends to vet her further. So he forces Gus to crash what he thinks is a picnic with Ruby and her friends Jessica, Derek and Stu. But the guys soon learn they have walked into a river-rafting trip instead. Ruby is thrown at first, saying there is not enough room, but then relents and hooks them up with gear.
Lassiter and Juliet are at the scene of a possible suicide with Gus, Shawn and Abigail. It appears the victim hung himself, but Shawn sees signs of murder and discovers dog tags stuffed down the dead man's throat. This is not just a murder now, it's a military crime, which poses jurisdictional problems. But Juliet says she knows someone who might be able to help with that, and she calls her brother Ewan, an ex-military man who is now hired out by the government for covert missions.
Juliet and Lassiter meet Gus at a vehicle storage yard in the middle of the night. Gus received a message from Shawn telling him that he’d solved the case and to meet him there but Shawn has not shown up and Gus is worried. He should be. Shawn is currently bound and stuffed into the trunk of a moving car. Shawn remembers a lesson Henry taught him as a child, and kicks out the rear light of the vehicle. Through the hole in the trunk, he’s able to spot some landmark, and manages to text Gus cryptic descriptions of what he sees. Back at the storage yard, Gus is puzzled by the message.
Stewart Gimbley bursts into the Psych office looking for help. He went to the police first but was referred to Shawn and Gus instead. Stewart wants the guys to lock him up and observe him overnight. He gives them a gun with silver bullets for their protection, because Stewart believes he's a werewolf. He thinks he killed a lamb last night and is worried that tonight he'll do worse. He offers them three times their rate, which they readily accept, thinking this will be easy money. They tie Stewart up but then fall asleep themselves, only to wake up to the sound of the window shattering.
A man on a bike pedals for his life, being chased by armed assailants. He reaches his apartment building, drops his bike and runs inside. He pulls a digital camcorder from his backpack and is able to email out its contents before the men break in and asphyxiate him. This man, it turns out, is Leonard “Diddle” Callahan, and a college friend of Gus’. Shawn and Gus attend Doddle’s funeral, where the minister says Diddle died from a hit and run accident on his bike.