 Daphne is unsure how to deal with Niles s feelings for her. Roz assures her there s nothing to worry about: Niles has a girlfriend now, and she s engaged to Donny. However, Niles has a meeting with Maris to console her over the loss of a friend, a meeting that he keeps secret from Mel. Frasier lets slip the secret, and Mel angrily breaks up with Niles, making Daphne very nervous. Frasier s Christmas party competes with one thrown by his rival neighbor, Cam Winston.