Upon entering the Fire Nation, Aang and his friends steal local clothes in order to live incognito among the citizens. Aang wears a headband to hide his airbender tattoos. After accidentally putting on a Fire Nation school uniform and being accused of truancy, Aang is taken to that school. Enjoying being able to socialize like a 'normal' kid and realizing the value of learning about the Fire Nation, he enrolls in the school. He later arranges a dance party for the rigidly disciplined and self-expression lacking Fire Nation pupils. When the school authorities learn about the party, the students help Aang and his friends escape. Meanwhile, Zuko hires an assassin to find and kill Aang.
Zuko tosses and turns in his sleep before he eventually awakens and arises from his bed. He makes his way toward a Fire Nationprison and looks distantly toward it. As he stands near the entrance, a guard spies him from the roof and demands to know Zuko's identity, but rather than reveal it, Zuko simply walks away.
Meanwhile, Aang and the others are traveling through the Fire Nation, using a combination of waterbending and airbending to hide Appa in a cloud. They take temporary shelter in a cave, and seek out new clothes so they can blend in with the Fire Nation citizens, eliminating the need to hide. They find an unattended clothesline and steal some outfits- with Toph modifying her shoes by removing the soles. Aang shyly blushes when Katara appears in her new outfit, but quickly indicates that she has to remove her mother's necklace. Afterwards, they venture into a bazaar to purchase some accessories, including a new necklace for Katara.
In town, the group attempts to blend in and act natural, which is somewhat impeded by Aang, who, having traveled through the Fire Nation a century before, claims to be an expert of their customs. He calls people he sees on the street "hotman" and uses other expressions that are clearly out of date. When the others go to buy food from a meat stand, Aang abstains due to his vegetarianism and goes off on his own for a bit. However, he is quickly caught by a group of soldiers who escort him into a classroom. His stolen clothing happens to be the uniform of a local school, and the soldiers assume that he is a student playing hooky. The teacher assumes he is a new student from the Fire Nation colonies in the Earth Kingdom. Aang calls himself Kuzon after his old Fire Nation friend and attempts to blend in at the school with partial success. After dismissal, he meets a friendly girl named On Ji, as well as On Ji's apparent boyfriend, Hide, a popular student with a much more aggressive personality. After a brief confrontation, Aang winds up making friends and playing a game known as "hide and explode" with Shoji and other children from the school.
Aang, covered in soot as a result of the game, returns to the cave at nightfall, to the relief of Katara, Sokka, and Toph, who were worried by his long absence. The fact that he had been attending a Fire Nation school all day shocks Aang's friends, especially Sokka. When Aang claims to have enjoyed the experience and wishes to return to the school the next day, Sokka strongly objects. Aang argues that he is obtaining valuable knowledge about the Fire Nation and manages to convince the warrior to allow him to continue attending the school. Aang joyfully exclaims, "Flameo, hotman!" to Sokka, who becomes utterly confused by his statement.
Meanwhile, Zuko returns to the prison. When confronted by the guard from the previous night, he aggressively threatens him not to tell anyone about his visit and proceeds to enter Iroh's cell. Iroh turns away from him, showing great disappointment in his nephew. Zuko blames Iroh for the latter's circumstances, and states that the two could have returned to the Fire Nation together as heroes. Iroh still refuses to speak, sending Zuko into a fit of rage and prompting him to leave.
The next day at school, Aang gets in trouble for not reciting the Fire Nation Oath correctly, having never previously heard it. The students think his bumbling through the oath is a funny joke, but the teacher punishes his disruption of the class by calling for a pop quiz on the Fire Nation's history. The first question asks for the year in which Fire Lord Sozindefeated the Air Nation Army. Aang, confused, asks if it was a trick question and points out to the stunned class that the Air Nomads had no formal military, and were defeated by an ambush. The teacher rejects his claim, as it is not in the Fire Nation's history texts, and states that he could not know that unless he had been there. Aang responds that he will just write down his best guess.
In band class, Aang tries to play the tsungi horn and gets chided by the teacher for dancing, which apparently is not considered proper in the Fire Nation. Nevertheless, On Ji is amused by the dance, and when Aang offers to show it to her during recess, he incurs the wrath of Hide, who attempts to hit him. However, Aang skillfully evades every attempted blow with his hands behind his back, eventually getting the clearly outmatched Hide to stumble and fall over without any bending or even touching him. However, this gets Aang into trouble for "roughing up" a favored student of the Headmaster, resulting in a parent-teacher conference. Sokka and Katara attend the conference acting as Aang's parents, "Mr. Wang Fire" and "Mrs. Sapphire Fire". Concluding the conference, the Headmaster warns them that any more disruption will result in "Kuzon" being sent to reform school, namely the coal mines. While they manage to succeed in fooling the teacher, Sokka is against Aang returning to school by saying "No more school for you, young man." Aang, however, tells Sokka that this is the first time since he found out that he was the Avatar that he has had the chance to be a normal kid, and insists that they need to do something for the children in the school in order to allow them, at least briefly, to have freedom of expression. Since these students are the next generation of the Fire Nation, changing them might help. He plans to hold a secret dance party in the cave for everyone in the school, to which Sokka, still wearing his beard, responds with an irritated, "Go to your room!"
Meanwhile, Zuko has a romantic picnic with Mai and they share a kiss. The two are interrupted by Azula, who tries to get Zuko to talk to her. He refuses, but Azula sends Mai away by saying that Ty Lee needs help untangling her braid. Mai complies politely, but gives Azula an angry look behind her back. Azula tricks Zuko into admitting that he was visiting Iroh, and warns him, with apparent sincerity, not to do so, as his visiting a traitor would make others suspicious. Nevertheless, Zuko visits his uncle in prison again. Again Iroh merely faces away from Zuko, who attempts to be kinder, bringing his uncle food as a gift. He begs his uncle for his advice, explaining that he believes the Avatar to be alive, and that he is confused and has no idea what to do about it without Iroh's guidance. When Iroh remains silent, Zuko flies into another rage, berating him, and leaves. As he leaves, Iroh continues to remain silent, but a tear runs down his face.
Back in the cave, the children arrive and the school band begins to play. However, they are stunned by nervousness, not knowing how to dance and afraid they will get in trouble. Aang demonstrates some dance forms, and eventually asks On Ji to dance, which gradually encourages the rest of the students to do the same. Sokka states that Aang and On Ji look good together, to which Katara gives a slightly terse response. The students gradually start to freestyle, although Toph, Sokka and Katara do not join in. Later, Aang asks Katara to dance. After hesitating, she takes Aang's hand and they perform a combination of Bagua and Northern Shaolin in synchronization, which does indeed appear to be an acrobatic dance based on their bending techniques- the students are all awed. At the end of the dance, Katara and Aang share a moment of what looks like mutual attraction. However, the Headmaster and several soldiers appear on the scene, having been told of the dance by Hide. They try to catch Aang, but he hides within the crowd of kids. Because the soldiers identify Aang with his headband, they are thrown off when they discover several other students wearing the same headband. Eventually, every student in the cave appears to have put one on, effectively delaying the Headmaster's hunt for Aang.
Team Avatar manages to slip away in the opening behind the cave. However, before leaving, Aang stops and exchanges smiles with Shoji before running off, closing the opening behind him with earthbending, leaving Shoji shocked and speechless. While the party flies off on Appa, Toph compliments Aang on his efforts, which she believes made a serious impact on the students. Katara agrees, thanks Aang for dancing with her and kisses him on the cheek, causing him to blush. Sokka refuses to take his fake beard off, claiming, "It's permanently glued to [his] skin".
Meanwhile, Zuko walks into a dark alley at night. There he meets a mysterious man with a metal arm and leg, as well as a tattooed third eye. Zuko states his purpose for contacting the man: he has heard the man is capable of doing his job effectively and secretly, and he wants him to track down and eliminate the Avatar.
This is the last time Katara's hair is in the Book One style; she is seen wearing it down for the rest of the series.
In the episode "Avatar Day", after Sokka lost his boomerang, he said it was like losing a part of his identity, like if Katara lost her hair loopies or Aang lost his arrows. In this episode, Katara stops sporting hair loopies to better blend in and does not wear them until the Invasion, and Aang "loses" his arrow by covering it up so no one can identify him as the Avatar.
When Aang and Katara are dancing, they circle one another with their wrists crossing and their hands flexed, which is exactly the same motion Zuko and the Lieutenant Jee perform in "The Storm" when they prepared to fight. This indicates that some of the basic forms for firebending and waterbending are the same, which means some of the children at the party could possibly recognize the technique, if they themselves are firebenders. The movement could have stemmed from the fact that they were doing Northern Shaolin, which combines elements of many other martial arts.
Aang is the second person to play the tsungi horn in the series, the first being Iroh. Zuko can also play this instrument, however, he does not enjoy doing so, seeing as he refused to play during music night on his ship when his crew was commandeered by Zhao.
This episode is the third time in which Aang blushes upon seeing Katara in a new outfit.
Kuzon, which Aang uses as a cover name, was first mentioned in "The Blue Spirit" when he talked to Zuko.
When the kids land on the island and enter the cave, Appa enters along with them, even though he does not like going underground or into any caves or tunnels they come across.
In one snapshot, before the gang steals clothes for themselves, Katara's eyes are brown instead of blue.
Katara claims the silk robe to wear, yet she takes a long skirt and a one-sleeved tank top instead.
Shortly after first putting on her new attire, before she changed to her new necklace, part of Katara's hair was incorrectly colored as part of the background.
When Toph is customizing her shoes so that she can see, she only breaks the sole off one of her shoes.
When the school appears for the first time, Fire Lord Ozai's statue is solely brownish-black in coloration, but after the scene in music class, some parts of the statue are a gold color.
When Aang first enters the classroom, there are sixteen seats and all are filled already. The second day he comes to class, he has a seat of the sixteen seats, so one person is missing.
When the bell rings and the students file into the courtyard, one student appears twice.
When Hide is standing next to On Ji and talking to Aang, there is a female student behind and to their right and a male student to their left walking away from the school building and toward the camera, in their direction. When the camera cuts to a side-view of Aang as Hide leans over him, it shows the male student walking on past the group. However, when the view cuts back to Hide and On Ji as they turn away, it still shows the same girl and boy behind them walking away from the school. When the camera cuts back to Aang and Shoji runs up to him, it shows the same female student on the left of the screen still walking toward the lens from the background.
When Aang comes back after playing hide and explode, the soot on his face does not move as his mouth moves.
Toph's Fire Nation outfit is red with golden stripes. In the scene where Aang first comes back from school, her outfit does not have the golden stripes.
When Zuko enters Iroh's prison cell, there is no stool in the room. After the commercial break, however, there is a stool which Zuko ends up burning.
When the class begins a pop quiz, Aang's paper is on his left hand side. In the next scene, it is directly in front of him even though he had not moved it.
When Ms. Kwan starts asking about the Air Nomad Genocide, there is a kid that does not have a book or pencil, but when Aang answers her question, the kid has them.
When Aang answers Ms. Kwan's question, he does not have any pencil with him. When he sits down to write his answer, however, he does.
When Zuko and Mai are having a romantic picnic, Mai is seen wearing gloves, but after Azula says that Ty Lee needs help untangling her braid, she is not wearing gloves anymore.
When Toph tells everybody to stop bending, there is no table made of rock in the middle of the cave, but when the kids arrive, there is.
When Aang starts to persuade everyone to dance, one member of The Flamey-Os does not move.
When Aang starts telling people to dance, one student appears twice in one shot.
When Katara and Aang start their dance, many of the kids behind them are missing the black outer layer part of their school uniform below their belt.
When the Headmaster and Hide show up at Aang's party, there are only three guards with them, one man and two women. However, when Headmaster orders the guards to stop dancing, an additional female guard is shown moving to the music
When the Headmaster interrupts Aang's party and tells the guards to stop tapping their feet, none of the kids are playing music, yet music can still be heard..
When Team Avatar is running away from the guards through the tunnel, Katara runs to the right while Aang runs to the left.
Aang uses the belt from the school uniform as a headband, but no one seems to find this strange as he claimed on the first day that he had an embarrassing scar. When the Headmaster searches for Aang in the cave, all the students wear their belts as headbands to aid his escape. Aang wears it with the emblem upside-down; according to an extra in this episode, he does this to resemble his arrow.
The music played when the chapter page is shown is the same music that The Flamey-Os play at the dance party.
The history teacher refers to the Air Nomads as the "Air Nation" and mentions their "army", revealing more of the Fire Nation's extensive propaganda campaign.
The dance party scene and the basic plot of the episode, a free-spirited young man teaching self-expression to the youth of an oppressive town, is loosely based on the 1984 film Footloose.
This episode marks Combustion Man's first appearance.
Katara and Aang incorporate "bending" moves into their dance.
One of the dance moves Aang performs is the "Phoenix Flight". This foreshadows Ozai crowning himself Phoenix King and using an armada of airships to attack the Earth Kingdom.
The leg movements in Aang's "Phoenix Flight" dance resemble those of Kazachok, a traditional Ukrainian folk dance.
When Aang leaves the group as they go into the store selling meat, one woman is seen wearing some of Toph's disguise clothes.
Mai shooting a dirty look at Azula is a precursor to the events that take place in the Boiling Rock when Mai liberates Sokka, Zuko, and the other fugitives from the gondola, betraying her alliance with Azula.
The dance that Katara and Aang do is based on Ba Gua Zhang and Northern Shaolin, according to Sifu Kisu. Some influences from the Bagua style of the airbenders include the "circle-walking" motions and the two performers mirroring each other. "Avatar Extras" confirms Capoeira to be a verified influence.
On Ji never once stated that Hide was her boyfriend. In fact, she was never seen smiling while he was with her.
After stealing their disguises, each team member buys an accessory that resembles what they each usually wear: Katara's necklace, Toph's hair piece, Sokka's wolf tail, and Aang dons a headband over his arrow.
The scene where all the kids are wearing their belts as headbands to confuse the guards into thinking they were Aang/Kuzon is similar to the historical event where over six thousand revolting slaves said they were Spartacus in order to protect him from the Romans.
This episode was already in pre-production by 2006, as evidenced by a post on Bryan Konietzko's Tumblr.