When Peter brings home a cutout of Kathy Ireland he begins having an affair with it until he eventually breaks off her head. After burying her in the yard, he comes back to get it on with Lois until he discovers a lump on her chest. At the doctor, Lois discovers that it's benign... and that she's Jewish.
It turns out Lois' parents lied about not being Jewish so they could get into country clubs. Lois wants to keep life the way it is, but Peter chooses to embrace their new found Jewish heritage.