 The girls have taken over the gym for gymnastic trials, and Fay excels. Sarah and Mandy, jealous of her prowess, suggest that Fay has a preference for girls, and Miss Gordon in particular, but Fay overhears and runs off, upset. Meanwhile the boys run round the school, in practice for the school walk, but skive off. Mr. Baxter finds them skulking around near the bins, and gives them "10 laps of honour", and a lecture about cheating. Roly s money-lending business has turned into a proper loan shark affair with menaces, run by Jimmy McClaren. McClaren proposes betting for the school walk, planning to nobble the certain winner. While running round the block, Zammo and Kevin read a newspaper headline that confirms that Grange Hill will merge with another school. While Roly s been getting bets for the dead-cert, McClaren and his cronies have failed to convince the athlete to forgo his victory. Miss Gordon tells Fay that she s been selected for the gymnastic team, and can t understand her lack of enthusiasm. Jackie has a heart-to-heart with grieving Zammo, then Gluxo appears on the scene with a message of war for McClaren...