Having forgotten to pay the bill for the family's health insurance, Hal tries to protect the boys from all accidents for the weekend; meanwhile, Lois accidentally gets Craig into trouble with their co-workers.
Reese and Malcolm find out that there was a murder in the family's house before they moved in. Hal is highly agitated in fear of ghosts from the murder and Malcolm tries to reason him out of it. Meanwhile Reese and Dewey take Jamie Trick or Treating and make a persistent enemy, whereas Lois is stuck at work because of a shoplifter no one want to take care of.
When Malcolm's arch nemesis and former teacher, Mr. Herkabe, crosses the line and hurts Reese's feelings too many times, he decides to pay him back for hurting his brother by revealing his former teacher's awful secret. He had flunked gym and lied about it. Because of that truth, the Principal decides to strip him of his trophy and hand it back to the one who passed gym, despite her blindness. Meanwhile, Hal gives Dewey a ton of wrong advices to a girl he likes.
While Malcolm battles a yearbook photographer to get a good photo, Hal, Lois, and Dewey intercept a scholarship check addressed to Malcolm and try to rationalize spending the money; Reese goes back to work delivering meat.
In a bid to get to catch the flight to St. Louis for Dewey's piano competition, everything seems to be going wrong for him. Meanwhile, Reese and Malcolm compete with each other to see whether Reese is man enough for the likes of Ida.
Trying to bury the fruits of their mischief--one of their father's trophies in the backyard--Reese and Dewey find an old bunker, in which they trap Hal to avoid punishment. Malcolm and Lois are in a competitive mood. Malcolm discovers his talent to dance, which he takes to a dance competition with Danielle (Lynsey Bartilson) and Lois keeps hold on a car until the bitter end.
Having been denied a very lucrative job in a software company, Malcolm accepts the vision his parents have for him. The first US president that will actually keep in mind the best interests of poor people like his own family.