Warning: Spoilers ahead.
The ep starts with a bit of Ilulu’s origin story. She’s playing with humans as a child. She loves humans. Her dragon dad is actually okay with this. But for some reason, humans attack a dragon village. Her parents attack the humans in retaliation, but they die. So the dragons forbid Ilulu from befriending humans ever again.
Picking up from the last ep, Kobayashi realizes that she suddenly got male parts as a prank by Ilulu, but she’s not sure why. As soon as Kobayashi gets home, she sees Tohru and feels different. Apparently, as a male, she finds Tohru attractive now! She figures Tohru would totally want to have sex with her if she knew about her male status. And she’s right!
The next day, Kobayashi does her best to keep her thing a secret from both Kanna and Tohru. But it’s not easy. She keeps getting put into physically close situations with the two girls. But she makes it through the day without incident. Her thing gets smaller as time goes on, so Kobayashi just hopes to go back to normal eventually.
Tohru invites Kobayashi for a little late night drink. And it’s a strong aphrodisiac alcohol. Tohru reveals that she found out Kobayashi’s secret at some point! And now Tohru is trying to seduce Kobayashi. She takes off her maid outfit and is completely naked. But that was a foolish mistake - as Kobayashi loves maids most of all. So she goes into maid otaku mode and talks Tohru’s ear off, and Tohru doesn’t get any sex.
In the next scene, Ilulu is being chased by some random harmony faction dragon. He’s a tall, ugly guy. Kobayashi actually wants to see Ilulu. She finds her knocked out in an alley. The ugly dragon guy tells Kobayashi to leave, but Kobayashi ain’t having it. She throws a loud alarm maker which gets the attention of nearby humans. And it gives Kobayashi the second she needs to escape the alley while carrying Ilulu!
Ilulu wakes up. She doesn’t understand why Kobayashi, a human, is helping her. She believes humans and dragons can’t be friends because that’s what she taught and how she was forced to live. So Kobayashi comforts her and offers to play with her.
Before Ilulu can accept, they’re interrupted by ugly dragon guy. He swats Kobayashi down. Tohru catches this, and you can bet she’s pissed someone hurt her precious Kobayashi! She chokes the guy out with ease and sends him packing. The danger subsided, but Kobayashi passes out from the hit she took.
She wakes up at home and sees everyone at her bedside, including Ilulu, who wants to play. So now Ilulu is living with them! But she needs to learn how to be more human. Tohru tells her to make human hands, but she can only make silly balls without fingers! And microscopic hands on them!
Also, Ilulu has decided she wants to make babies with Kobayashi! Tohru is not amused.