The night Club featured in this episode is the legendary Dallas institution, the Starck Club. So called because it was legendary designer Philippe Starck's first design in the US. Also ground zero for the entire Rave/Ecstasy scene. It's also the subject of the doc Warriors of the Discotheque!
Carrying a red handkerchief in one's left pocket - like the one Joe lifts from the guy in the nightclub indicates that the person is a top and into (specific) hardcore sex acts.