Peggy survives falling out of a plane, but is in a full body cast. Hank is overcome with guilt at having encouraged her to jump out of the plane, but that might not be the real reason Peggy jumped. Meanwhile, Didi gives birth to a baby boy, whom Cotton names "Good Hank." But Didi and Cotton don't know how to deal with a baby, and they leave most of the work to Bobby.

When Peggy gets out of her body cast, she is unable to walk and depressed by the long, slow process of rehabilitation. Cotton decides to teach her to walk again by challenging her, military-style, and inspires her with tales of his wartime heroism. But Peggy starts to lose confidence when she finds out that Cotton's war stories were all fake.

Bill's Arlen High School record for touchdowns is about to be broken, by Arlen's current football hero, Ricky Suggs. When Ricky breaks his leg, the other team allows him to score so he can get the record. Outraged by this bad sportsmanship, Hank convinces the Arlen High coach to let Bill (who never officially graduated from high school) play a game so he can get his record back.

When Hank becomes a substitute shop teacher at Tom Landry Middle School, he is so popular that he may beat Peggy as Substitute Teacher of the Year. When Bobby is found bringing a keyhole saw to Hank's shop class, because the class has no tools, Hank gets in trouble for violating the school's zero-tolerance policy on weapons. The punishment is that he may no longer teach shop at Tom Landry.

Kahn and Minh go to Hawaii on a business trip, leaving Connie with the Hills. Minh leaves Peggy with a thick book of hand written instructions, on "How to be a parent", covering any thing and everything--except Connie's first period. Hank and Connie are left to figure that problem out on their own.

Hank wins an Alamo Beer contest, which gives him the chance to win 1 million dollars. He travels to a football game in New Orleans to try and win Bobby's college money, amongst other things. Meanwhile, Bill rides along to his aunt's plantation in Louisiana to visit. He is confronted by three very beautiful cousins each with an agenda to marry the last remaining available Dauterive, who happens to be Bill.

Hank and his family plan to visit Peggy's family in Montana for Thanksgiving. But their plane is delayed, and when they finally get on the plane, the flight is cancelled when Hank's Thanksgiving turkey is mistaken for a bomb.

Hank meets a man, Hal, who is exactly like him in every way and they start to spend time together. He and Hal become great friends, making Dale and Bill jealous. Hank is torn between the friendships, when the group doesn't mesh.

Bobby adopts a raccoon, Bandit, who bites Ladybird and Dale and then runs off, pursued by Ladybird. Fearing that Bandit might have been rabid, Hank tries to save his dog, while Bobby just wants to find Bandit. Meanwhile, Dale, convinced that he has rabies, runs off to the woods and starts living on mushrooms, which give him hallucinations.

As the year 2000 approaches, Hank becomes a believer in the Y2K bug. He tries to prepare for the millennium by eliminating modern technology, and instead of buying Peggy the new computer she wanted, he gets her an old grandfather clock. Strickland Propane closes its doors in the midst of the panic, leaving customers lined up at the door, as Hank does the unthinkable, and takes off with the only remaining Propane Tanks.

Bobby gets an F in English, from a former colleague of Peggy's. So she helps him write a new essay, and winds up writing the whole thing. The essay gets an A, and Bobby gets the credit, making Peggy jealous. Meanwhile, Bill brings home a huge American flag from the army base.

The rodeo comes to town. Joseph finds his calling and becomes a successful young cowboy star. Bobby also falls in love with the rodeo, and joins in the fun . . . as a clown. He doesn't tell Hank, until he is called upon to save Joseph, who had turned on Bobby, calling him the joke of the rodeo.

Buck Strickland's wife Miz Liz catches him at a company dinner with his mistress Debbie, and files for divorce. She takes over Strickland Propane, and promotes Hank to Manager. Hank finds himself fending off her advances, when she decides that an affair is the answer. Debbie, who is attracted to men with power, also starts to try and seduce Hank. Meanwhile, Peggy takes over Buck's barbecue joint, Sugarfoot's, and turns it into a standardized restaurant.

Debbie is found dead in the dumpster behind Sugarfoot's restaurant, and Hank is a suspect. Hank was with Debbie's roommate Gayle at the time, but he's afraid to tell the police, because he'd have to admit that he accidentally smoked some of Gayle's marijuana. Buck decides that he loves his wife after all.

Bobby accidentally sees Luanne naked, Joseph becomes obsessed with getting a peek as well. When Connie catches Bobby and Joseph standing outside holding binoculars, she accuses them of peeping at her. Meanwhile, Boomhauer accidentally gets committed to a mental institution, and when Dale and Bill try to get him out, they get committed too.

Frustrated with having to obey Hank's house rules, Luanne moves out and rents a house across the street with three other college students. In trying to get her selfish housemates to help out and pay the bills, she finds herself becoming more like Hank.

Peggy gets caught up in a pyramid scheme, selling Metalife health bars. When she discovers that Bill has a talent for selling the product, she enlists his help. To keep him working for her, she realizes that she has to be mean to him, because being treated badly is the only thing Bill knows how to respond to. Despite all of the recognition that she gets, it isn't worth belittling a friend.

A group of Buddhist monks suspects that Bobby might be the reincarnation of the Lama Sanglug. Bobby enjoys getting caught up in Buddhism, until he and Connie learn that Lamas are not allowed to have girlfriends.

Hank's long time barber goes senile, so he turns to Bill, an army barber, for his haircuts. Bill gives him a great haircut, but it turns out that the bill for an army haircut comes to 0. When Hank protests this waste, the army base shuts down its barber unit, and Bill is out of a job.

Hank finally starts to like Bobby's comedy career when Bobby starts entertaining the employees at Strickland Propane with propane-related comedy.

Nancy and Dale go to a romantic restaurant and fall in love all over again. Nancy decides to end her affair with John Redcorn and be faithful to her husband. But she soon starts to wonder whether she made the right decision.

During a drought, Hank installs low-flow toilets in his house. But he soon finds that they require so many flushes that they actually waste more water than the old toilets. Hank joins the Arlen zoning board in an attempt to get high-flow toilets legalized again.

Peggy feels ashamed of her big feet until she meets Grant Trimble, who tells her that her feet are beautiful and even videotapes them. Soon Peggy's big feet are a hit on an internet fetish site, peggysfeet.com.

When the Hills go to the Country Music Fan Fair in Nashville, Peggy hears Randy Travis singing a new song, "Just the Way God Made Me," and accuses him of having stolen it from her.