Already agitated with Bill's antics, Hank is further incensed when Bill passes on lice to the guys. The guys try unsuccessfully to remove the lice with shampoo and become so angry that they refuse to drink with Bill in the alley.
A depressed Bill is arrested for public drunkenness, but Hank refuses to post his bail. In jail, Bill is a hit with fellow prisoners and relishes his newfound popularity. Meanwhile, Hank and the guys shave their heads to eradicate the lice.
Hank is appalled when he sees the name "Bill" tattooed on his scalp and can't remember how he got it. Hank immediately gets the tattoo removed. Then Boomhauer reminds him of a time 20 years ago when Hank looked up to Bill, and Hank was devastated that Bill was heading off to the Army.
Boomhauer explains that Hank, in a tribute to his friend, decided to have "Bill" tattooed on his arm, but Bill convinced him to do it somewhere less visible. Hank softens and goes to jail to post bail for Bill, but an adamant Bill refuses to leave.
Hank decides he must reason with Bill before Bill foolishly admits to any crimes to stay in jail. Hank gets himself thrown in jail in an effort to talk to Bill. In jail, Hank pleads for Bill's forgiveness, but Bill points out that if they were true friends, Hank would have kept the tattoo. To prove his loyalty, Hank gets another tattoo and the two become friends again.