Diane finds the perfect house for her and Sam to buy. An elderly couple, Bert and Lillian Miller, currently live there and have for forty years. After hearing the Miller's stories of life in that house, Diane no longer thinks that it is the perfect house for her since it is Bert and Lillian's emotionally. Based on a statement by the Millers that they will miss the Christmases the most, Frasier suggests that Sam and Diane give the Millers one last Christmas in the house to rid Diane and Sam of any guilt. Sam thinks it's a screwy idea, but it's just what Diane needs. Despite it being the heat of summer, Diane decides not to wait until December and to have Christmas come in the summer this year, at least for the Millers and their extended family. The summer Christmas party has an unintended effect both for the Millers and for Diane, but Sam decides he needs to take control of the situation which isn't totally under control until he sees dogs playing black jack.
- Diane comes into the bar, and happily tells Sam she's found the perfect house for them to move into! However, Sam reminds her that they originally planned to live together in his apartment at the start of their marriage. It soon seems that Diane in her 'own way,' has decided that the house is so perfect for them, that she already put money down for it!
Sam of course grows livid about this decision, but after Diane shows him the house, he begins to change his mind. Though upon their visiting the house, they run into its elderly owners, moving some of the last of their things out. However, the two get a small case of nostalgia, remembering certain moments in the house, and remarking how they spent 39 Christmases in the house, but didn't quite make it to 40.
After they leave, the couple's memories make Diane unable to consider living in the house. Sam attempts to convince her that it will be alright, and decides to help sell the house to someone else. However, even there Diane interjects, claiming the one couple who were interested in purchasing the house, just weren't right for it.
Frasier finally resolves the issue, saying that Sam and Diane can hold a small farewell party for the elderly couple and their family, and Diane decides on a Christmas-themed party (even though it's sweltering outside), giving them and their family a 40th Christmas, complete with Sam dressed as Santa Claus.
As the family reminisces and also grows sad about their time in the house being up, Diane attempts to mention throwing an Easter party for them soon, finally causing Sam to interject, claiming that while the former family had some great memories, it is time for them to move on. The family agrees, and takes their leave of the house.
After they leave, Diane claims she actually is proud of Sam, in that he now has helped claim the house for them.