Malcolm's teacher forces him to secretly record Reese as he divulges his innermost secrets; Francis strikes back after a critic writes a scathing review about the hotel; Dewey secretly starts his own novelty act at an outdoor mall.
Malcolm films Reese for a school psychology assignment, then discovers that he is an unwitting participant in one of Mr. Herkabe's experiments, causing him to be portrayed as a sadistic maniac, also losing Reese's trust.
Meanwhile, Hal fears he'll lose his job when top officials at his company are arrested for embezzlement. He tires to keep this information to himself as to not worry his family about the financial trouble at his place of work
Lois is having problems with her two biggest tormentors aside Malcolm and Reese, the defective washer and dryer. They keep breaking down and keeps yelling at them to stop it. Hal comes home and suggests they replace it, but she refuses. Lois reminds him of the financial trouble they're in due to her own problems at Lucky Aide.
At the Grotto Ranch, Francis strikes back after critic Charles Cutler writes a scathing review about the hotel. When They invite him back, his criticism is nothing but verbal abuse. After he insults Piama, Francis and Otto, the two Men beat him senseless. After Cutler is taken to the hospital and the newspapers trumpet the story, the Grotto's business begins to boom again, largely because every Restaurant, Hotel and Art Gallery in the state despised Cutler and are happy to see that he got what he deserved. He even gave a scathing review for the hospital he was at.
When Dewey skips school, he starts earning big money working as a street magician. Soon, Hal and Lois finds his stash of money. However, they assume it was from Hal's secret savings and end up using the money to buy a new washer and dryer.
Malcolm comes up with a quick plan for payback against Herkabe. To do so, he initiates a fight between school bully, Ira, and another student. This distracts Herkabe to run out and break the fight up. Malcolm goes into his office to reveal the other students' dirty secrets (also his own as payback to Reese) they paid Herkabe over the years. Humiliated, Herkabe asks his sidekick to erase the files, but the damages have been done. In the end, Malcolm is suspended from school along with having to clean the cafeteria. A gleeful Reese is having the time of his life pointing out the other students flaws, causing everybody to distance themselves in shame.
- Jane Kaczmerek as Lois
- Bryan Cranston as Hal
- Christopher Kennedy Masterson as Francis
- Justin Berfield as Reese
- Erik Per Sullivan as Dewey
- Frankie Muniz as Malcolm
- Chris Eigeman as Mr. Herkabe
- Kenneth Mars as Otto
- Jonny Acker as Ira Prescott
- Craig Lamar Traylor as Stevie Kenarban
- Emy Coligado as Piama
- Don McManus as Charles Cutler
- Julian Barnes as Mr. Fortinberry
- Joan Blair as Lunch Lady Shirley
- David Battisini as Truant Officer
- Darryl Reed Jr. as Senior
- Jennifer Shon as Patty Lin
- Jacob Gray as Malcolm's Classmate (Uncredited)