Felicity returns from Christmas break and promptly announces that she wants to lose her virginity to Noel. She believes that she needs to have sex as soon as possible because she feels like an outsider. Julie tells Noel that she and Ben have been "hanging out" a lot, as she is able to sleep better at his place. They are not officially a couple, but went away to Vermont together during vacation. Noel asks Julie not to say anything until after his big night with Felicity. Felicity seeks advice from many different sources--including books, a health care worker and Elena. The couple's first attempt goes awry when some guys walk in on them, and a dried-up Christmas tree catches fire in Noel's room. They reserve a hotel room, but Felicity calls Julie from the bathroom and senses that something is wrong. Noel tells Felicity about Julie and Ben. When she becomes upset, he declares that she is not over Ben. Elena has a talk with him and accuses him of using Felicity's feelings for Ben as an excuse so that he doesn't have to worry about screwing up the relationship. Ben and Julie decide to begin dating, but will take things slowly. Felicity offers her blessing. Felicity and Noel decide that the time is not right for them to sleep together. Blair gives Elena an article of clothing as a gift. She tries desperately to find out exactly what it is.