"Maybe the house is haunted," Malcolm's shrugging suggestion is followed by images of him setting one on fire, Reese's bat accidentally hitting ones head, and Hal driving over a beloved pet of another former neighbor. The new neighbors are professionals no less. Lois is the only one that seems to find it odd that they would move into the rancher next door.
Olie North is visiting the Marlin Academy. Spangler worships the man, he has a nationally syndicated radio show after all. The boys seem to be drilling all the time, the funniest one being the "Candy man can" drill. And gays are not allowed out in the military? Such a shame.
The family visits the neighbors and their pool before the Reeds McCarthys or the feared Whitfords do. Tina's tone tells us she's a bit disappointed that Lois doesn't know a good ethically challenged doctor for "neck pain, or back pain. Whatever..." Her son Josh is a respectable liar who's every turn of phrase gets Malcolm in trouble. The girl, Emily seems innocent enough. Until she decides to eat Reese alive. He seems to understand that he can not hit the little girl. The greatest feud is between Dewey and the gnome, that is the evil child eating gnome.
Hal however meets a man that can cook a burger flipping only once, who even teaches him how. They only once feel the need to state that they are not gay and they share a taste for Cheap Trick and vinyl. At one point Hal calls Mike his best friend.
"A feud is just what this family needs" Reese takes charge of the family after Hal's plea for the them to take a long hard look at themselves falls on deaf ears. This doesn't seem to be a winning strategy. Reese has nightmares about Emily. Dewey throws a rock at the evil gnome only to have it bounced back into his eye, then later it glares him down from his own kitchen table. Malcolm is accused of being a Peeping Tom, which he tries to deny by explaining the neighbors are all ugly. He thinks it might just blow over until he comes home to Dewey singing:
Late at night
When you're sleeping
That's when Malcolm comes a peeping
You better beware
Or Malcolm will see your underwear
At Marlin, Spangler sleeps through the Olie North visit after a night of drinking. He's distraught but Francis convinces him that he got drunk with Olie. In so doing we have an entire episode where Francis has not broken a single rule, law or international treaty.
In Malcolm's world the family has stooped to a new low in planning and forethought. Reese and Malcolm plan to plant stolen goods in front of Josh's window and call the police so that Emily gets left by the side of the road to bite hill-billies and truckers while the family is too tied up in legal troubles for Josh to bother Malcolm or for Tina to annoy Lois. In Reese's words, "If there is one thing I've learned it's that you can't clear your own name, you can only ruin someone elses." Which is borne out when they discover Tina in her Jacuzzi with the gardener. Whatever he sees, Malcolm screams like a banshee and all the neighbors come a peeping.
One wonders what this might do for Malcolm's peeping reputation, but rest assured there is a happy ending. As the moving truck leaves we hear a big CRACK! Dewey has killed; he jumps for joy on the crushed remnants of the Evil Gnome.