There's a special filing cabinet for things from corporate, manager Michael Scott told Pam, the receptionist. And that place is the garbage can. He demonstrated by wadding up a fax and throwing it away.
Jan, Michael's boss from corporate, came by for a scheduled meeting. When she asked if he wanted to add something to the agenda she faxed that morning, Michael blamed Pam for not getting it to him. Jan then got down to the business at hand: Either his branch or the Stanford branch had to close.
It didn't take long for rumors to spread about the possible downsizing. Pam didn't think it would be the worst thing if they let her go, 'cause she'd be able to pursue her dreams of being an illustrator. Dwight was also ready for the bloodletting to begin.
Michael assembled the staff to tell them that either they or the Stanford branch would be downsized. He promised to go to bat for the office, and swore that he wouldn't let anyone lose their job.
Michael introduced Ryan, the new temp, to Jim and Dwight. Dwight wanted to show Ryan some pictures of his car, but when he opened a desk drawer he saw that Jim had embedded his office supplies in Jell-O again. Everyone but Dwight had a good laugh, but Dwight was more concerned about damage to company property.
Jim made plans with Pam to have an end-of-week drink, but Roy, her fiance, put a stop to this. Jim invited Roy out with them, but he declined. An awkward moment followed when Pam left the two men on their own - it was obvious that Jim had a deep crush on her.
Michael thought it would be funny to play a trick on Pam by telling her that he was fired for stealing Post-It Notes. When her crying got to be too much for him to take, Michael told her that she'd been tricked. According to Michael, it was a "morale-boosting" thing. "You're a jerk," Pam told him, but Michael didn't agree with this assessment.