We see Jerry lying on his bed shaking some maracas and remembering his night of dancing. Joe climbs in the window and asks him how he’s doing. “Have I got things to tell you!” Jerry exclaims, announcing that he and Osgood are engaged. “Congratulations! Who’s the lucky girl?” Joe asks. “I am…” says Jerry, giggling and shaking the maracas. Joe stops short, realizing what Jerry said, and Jerry informs him that he’s engaged to Osgood. Pressing him, Joe asks how he plans to pull this plan off, with Jerry eventually telling him that he plans to reveal his true sex after the wedding ceremony, getting a swift annulment, and then living off Osgood’s alimony. As Joe tries to convince Jerry that it’s a crazy idea—“there are laws, conventions, it’s just not being done”—but Jerry tries to reason with Joe that “this might be my last chance to marry a millionaire.” Joe levels with Jerry, reminding him, “You’re a boy!” This snaps Jerry out of it, and he removes his wig despondently. “Now what am I gonna do about my engagement present!” he says, showing Joe a beautiful diamond bracelet that Osgood gave him. Amazed by the beauty of Osgood’s present, Joe begins to backpedal on his urging Jerry not to marry Osgood, saying, “After all, we don’t want to hurt Osgood’s feelings.” Jerry is confused, as someone begins to knock on the door.
It’s Sugar, and Joe and Jerry hastily put on their wigs, Joe diving into bed so that Sugar doesn’t see that he is still wearing his Junior costume. Sugar enters and tells them she can’t sleep, and when Jerry offers her some bourbon, she tells them, “I’m off that stuff for good.” Sugar lies down on Jerry’s bed and tells them about her wonderful date with Junior. Jerry asks if he got fresh, but Sugar assures him that he was very respectful and needed her help, fondly remembering the evening and telling them that she thinks Junior will propose soon. Joe then tells Sugar, “Daphne got a proposal tonight!” which delights Sugar. Sugar then looks over at Joe, dismayed that “Josephine” hasn’t found a “beau” on the trip. Just as she says so, the underage bellboy bursts into the room hoping to sweep “Josephine” off her feet. “Here I am doll!” he says, and Joe covers his face with the sheet.
The scene shifts and we see Spats Columbo along with his cronies entering the Seminole Ritz hotel as ominous music plays. They look up at a banner that reads, “Welcome Delegates, 10th Annual Convention, Friends of Italian Opera.” They are apparently not there looking for Joe and Jerry at all, but there for some kind of mobster convention. They sign in at a nearby table for the convention, as the investigator who led the raid of the speakeasy earlier in the film reads a newspaper nearby, peering over the top of it at Spats and his gang. A man flipping a coin near the convention check-in table tells Spats that he didn’t think he would show after what happened to Toothpick Charlie, then tells Spats that a mobster named Little Bonaparte wants to see him. Before Spats goes to meet Little Bonaparte, a man pats him down, checking for weapons. The frisker finds a gun in the pant leg of one of Spats’s cronies, which he confiscates. We now see the investigator from the speakeasy watching it all go down, smiling. As Spats walks towards the front desk the investigator stops him, and questions him about the shooting that took place at the garage. Spats plays dumb, even though the investigator tells Spats that he knows that there were witnesses at the garage. The investigator says, “Don’t worry, Spats, one of these days we’re gonna dig up those two guys”—referring, we realize, to Joe and Jerry—and Spats agrees that they will have to dig them up.
Joe and Jerry, dressed as Josephine and Daphne, emerge from the elevator in the hotel lobby. Jerry is on his way to return the diamond bracelet to Osgood and call off the engagement, and Joe urges him to fix his lipstick in anticipation of the meeting. When Jerry laments that Osgood will be disappointed, Joe assures him, “It’s gonna break Sugar’s heart when she finds out I’m not a millionaire. That’s life: You can’t make an omelet without breaking an egg!” As Joe tries to comfort Jerry that at least they found people who love them, Jerry pulls out a compact, and in the mirror sees Spats Columbo and his men. “Something tells me the omelet is about to hit the fan!” Jerry says, motioning over to Spats, and Jerry and Joe run into the elevator. Just as the doors are closing, however, Spats and his gang join them on the elevator. The mobsters remove their hats and look at Joe and Jerry in their disguises, and it seems for a moment that they will recognize them. However, their female disguises work, and while the mobsters think that “Daphne” and “Josephine” look familiar, they do not recognize them as the witnesses from the garage. “We wouldn’t be caught dead in Chicago!” insists Jerry.
Before getting off the elevator, one of Spats’s men examines Joe’s key, noting the duo’s room number. “Don’t call us, we’ll call you!” says Jerry, laughing. Joe and Jerry safely escape. The scene shifts to them in their room, where Joe and Jerry frantically pack suitcases, sure that the gangsters are on to them. “I tell you, I will never find another man who’s so good to me,” Jerry says of Osgood as they pack. Jerry then outlines a plan: they should sell the bracelet, use the money to go to South America and hide out. Joe isn’t listening, however, because he is transfixed looking at the hat he wore to inhabit the part of “Junior,” before going to the phone and calling Sugar’s room. He wants to say goodbye, and when Jerry insists that Joe never takes the time to say goodbye to women he’s dated, Joe insists, “That was back when I was a saxophone player!” Sugar answers, excited that Junior is calling. Affecting Junior’s voice, Joe tells Sugar that he didn’t sleep well, but Sugar tells him that she slept wonderfully and had a dream about them being together on the yacht. Joe then confesses to Sugar that he cannot make it to their date that evening, and that he has to leave for an unexpected engagement in South America. When Sugar asks him how long he will be gone, Joe tells her that he’s not coming back and implies that he will be marrying a woman in Venezuela, which disappoints Sugar. He apologizes and tells her that the marriage is a business move, that it’s good for his oil business, and Sugar tells him that she understands. Jerry has left the room in a huff, so while he speaks on the phone to Sugar, Joe drops the bracelet from Osgood in a gift box filled with flowers and kicks it over to Sugar’s door.
Sugar sends Dolores to check if the gift that Junior alleges to have sent is at the door. Dolores brings the box to Sugar’s bed. “Real diamonds, they must be worth their weight in gold!” Sugar exclaims, as she finds the bracelet in the box. “I wanted you to know how very grateful I am for what you did for me,” Joe tells her, and the couple finish their conversation and hang up. Jerry rushes into the room to continue packing, but is disturbed when he cannot find his bracelet. As the duo begins to argue about the fate of the bracelet, Sugar enters their room, despondent. As she rummages in the dresser for the bourbon, Joe asks her what’s wrong and Jerry notices his bracelet on her wrist. “You like it?…Junior gave it to me,” Sugar tells Jerry, who looks at Jerry angrily. Sugar is despondent, takes the bourbon and leaves. Left alone again, Jerry scolds Joe for giving away the bracelet and abandoning their only chance for making any money. The two musicians climb out the window of the hotel.
Downstairs, one of Spats’ cronies tells Spats that he heard that Little Bonaparte is upset about what happened to Toothpick Charlie, as Bonaparte and Charlie were very close. Spats dismisses these claims, saying that Little Bonaparte’s gotten soft, and that he isn’t intimidated in the least. “How are we gonna retire him?” asks one of Spats’ cronies, and Spats assures him that they will think of something. Suddenly, Spats’ meeting is interrupted by Joe and Jerry climbing down the banister on the porch outside. “Look! The two broads from the elevator,” exclaims one of them, and Spats’ men rush to the window. Spying the gangsters, Joe and Jerry run away, terrified. When the “dames” run away, Spats’ men get suspicious—“maybe those dames ain’t dames,” says one of them. Spats rushes outside and picks up Jerry’s upright bass. When he opens its case, they find the bullet holes in the side of the bass, and know that they’ve found their witnesses. Spats leads the men out of the room to find Joe and Jerry.
As Spats’ men leave the hotel, Joe and Jerry climb in another window unnoticed. When Jerry asks Joe what they should do, Joe tells him that they should get out of the women’s clothes they are wearing, and they skulk down the hall. They follow a wheelchair-bound man and the young bellboy into a room, intending to steal their clothes. The scene shifts and we see them emerging from the elevator, Jerry dressed as a bellboy, and Joe sitting in the wheelchair, wrapped in a blanket and wearing dark sunglasses. As Jerry pushes Joe through the lobby, Spats and his men are suspicious when they see that Jerry is still wearing high heels in spite of being dressed as a bellboy. This tips them off to the fact that it’s Joe and Jerry. The gangsters follow the two men through the lobby, chasing them down a series of hallways. Joe and Jerry stumble into a room where some mobsters are standing near a large cake decorated for Columbo. The next room is set up for the opera convention, a front for the meeting being held by Little Bonaparte.
As the mobsters file into the convention room, Joe and Jerry slide under the table to hide. Spats and his men sit down at the table and Spats asked what happened to Joe and Jerry. His crony tells him that they lost the two musicians “in the shuffle.” Joe and Jerry listen as the mobsters decide that they will find them after the banquet. Little Bonaparte enters to thunderous applause and says a few words, thanking everyone for being there and celebrating the mobsters’ financial successes of the year. He then invites everyone to stand and remember the members of their organization who were lost that year, including Toothpick Charlie. Everyone stands except Spats and his men, and Little Bonaparte snaps at them, ordering them to stand. The scene shifts to the kitchen, where a gangster is climbing inside a giant cake. Another gangster tells him that he should come out the second time that the group in the banquet hall sings. The gangster getting in the cake takes a machine gun from the other guy and crouches down inside the cake as they put a lid on it.
Back in the banquet hall, Little Bonaparte has everyone sit and announces his retirement. When the topic of his successor comes up, he begins to extol the credentials of Spats Columbo, implying that Spats will take his place. He also obliquely expresses his dislike for Spats however, saying, “That big noise he made on St. Valentine’s Day, that wasn’t very good for public relations,” referring to the murder of Toothpick Charlie, and the fact that Spats let two witnesses get away. “Don’t worry about those two guys, they’re as good as dead,” Spats tells Bonaparte, but this only angers Bonaparte more, who is disappointed to hear that Spats let Joe and Jerry get away twice. Little Bonaparte then has the men bring out the cake, in honor of Spats’ upcoming birthday. The men sing as someone turns off all the lights and the cake is wheeled out. Suddenly, the man in the cake pops out and shoots Spats and his men dead with a machine gun. Little Bonaparte appears to have a tape recorder attached to his jacket. Joe and Jerry quiver under the table, before scurrying out, terrified by the murders they just witnessed.
“Get those two guys!” yells Little Bonaparte, urging his men to run after them just as the investigator from the speakeasy walks into the banquet hall and asks what just happened. “You wanna make a federal case out of it?” asks Little Bonaparte, and the investigator grabs the tape recorder attached to Bonaparte’s jacket and says into it, “Yeah!” Outside Joe and Jerry run through the lobby and up the stairs, pursued by two of Bonaparte’s men. The camera pans over to the elevator and “Josephine” and “Daphne” emerge. Bonaparte’s henchmen come running down the stairs, having lost Joe and Jerry, convening with two other gangsters who assure them that they’ve got guys watching the roads, the railroad station, and the airport. Hearing this, “Daphne” is startled, but Joe assures him, “Yeah, but they’re not watching yachts. You’re gonna call Osgood.” When Jerry protests, Joe tells him that it’s the only way to escape certain death and Jerry rushes into a phone booth to call Osgood.
While Joe waits, he hears Sugar singing “I’m Through With Love” somewhere nearby. He wanders to a staircase and finds her sitting on a piano and singing in a dance hall. Joe watches her sing from the shadows, before wandering up to her and kissing her passionately on the piano. Sugar is startled by the kiss, leaning back and exclaiming, “Josephine!” Seeing the seemingly lesbian kiss, Sweet Sue calls out to Bienstock, just as two of Bonaparte’s men recognize Joe from the audience. Sugar is confused, still not realizing that “Josephine” is a man as the two men chase Joe off the stage. He runs up the stairs to find Jerry, and they run and hide from Bonaparte’s men. As two boys wheel out Spats’ body under a sheet, Joe and Jerry pop out from the bottom of the stretcher and run out the hotel door.
Outside, Osgood waits for them, when suddenly they come sprinting down the pier. Jumping in the boat, Jerry introduces “my friend Josephine, she’ll be a bridesmaid!” and hurries Osgood along, so they can escape Bonaparte’s men. Suddenly, Sugar comes riding down to the pier on a bicycle, yelling “Wait for Sugar!” She climbs in and they begin riding out to Osgood’s yacht. Joe removes his wig, assuring Sugar that she doesn’t want him, because he’s a “liar and a phony, a saxophone player, one of those no-goodniks you keep running away from.” Sugar is undeterred, however, and wants to be with him anyway. Jerry then admits to Osgood that they cannot get married, because he’s a man. Osgood simply responds, “Nobody’s perfect!”
The film takes a huge comic turn when Jerry commits so fully to his role as “Daphne” that he accepts Osgood’s marriage proposal. While Jerry had initially felt dismayed by male attention, and had trouble internalizing the fact that he was a girl—“I’m a girl!” was his main mantra on the train—a night of passionate dancing and dotage has made him feel like a true lady. When Joe asks “who’s the lucky girl?” after Jerry tells him he’s engaged, Jerry gleefully confesses, “I am!” Jerry feels set free by his status as a desirable woman, and doesn’t seem to understand why Joe thinks the arrangement is impossible. While Jerry eventually admits that he knows the same sex relationship will not work, the practical and the romantic blend together in humorous ways. Implying that Osgood will surely discover Jerry’s true sex on their honeymoon, Joe asks, “What are you gonna do on your honeymoon?” Jerry responds, “We've been discussing that. He wants to go to the Riviera but I kinda lean towards Niagara Falls,” as though the problem of his performed sex is not an issue. Entranced by the idea of alimony and the protection of a wealthy husband, Jerry is beside himself with excitement, to such an extent that he is not worried about the major complications.
Jerry’s desire to marry Osgood presents a very interesting dynamic for the modern American viewer, who has seen the passage of a law allowing for marriage equality, extending marriage rights to same sex couples. While Jerry’s situation—in which he wants to pose as a girl in order to marry a millionaire for his money—is certainly not a straightforward union between two consenting male adults, it is an undoubtedly queer union, and evidence that Jerry is enjoying his drag persona more than he expected. Indeed, Jerry has acclimated to playing the part of “Daphne” to the extent that he has no qualms with marrying a man and playing the part of doting wife; he is even excited about the honeymoon. It is Joe’s task now to try and bring Jerry back down to earth, to remind him that he is not a gold-digging woman, but a man on the run from the mob. “You’re a boy!” Joe insists to Jerry, which seems to relieve Jerry from his belief in the possibility of his marrying Osgood. This realization is a harsh one for Jerry: as he removes his wig and leans on the bed frame, he bemoans the complicated position he’s gotten himself into—“I wish I were dead,” he says, shaken out of his nuptial fantasy. Even after the marriage idea fades, however, Jerry remains devoted to Osgood in some way, nervous to disappoint him when he must return the diamond bracelet.
Joe and Jerry’s situation is complicated all the more by the arrival of Spats Columbo and his gang. Spats is there for a convention of mobsters, not to find Joe and Jerry, but when the investigator who followed him to Florida informs him that he knows there were witnesses that night in the garage, Spats realizes that he will definitely have to kill Joe and Jerry. How convenient that they are staying at the same hotel! Luckily for Joe and Jerry, however, the gangsters are (at least initially) fooled by their drag personas. While they suspect that they have seen “Daphne and “Josephine” before, they do not know from where, and they believe that they are women. Deeply spooked, Joe and Jerry begin plotting how to get out of the hotel alive. Their feminine disguises, however, only make them all the more intriguing to the band of gangsters.
Both Joe and Jerry are changed by their time leading double (and in Joe’s case, triple) lives. Jerry is, rather curiously, taken with his life posing as a woman and being Osgood’s date, and is sad that he won’t be able to get married and accept fancy presents from a millionaire husband. He was entranced by their evening of dancing, and even the sight of maracas—an instrument heavily featured during their dance—sends him into a romantic daze. He even goes so far as to complain to Joe, “I tell you, I will never find another man who is so good to me,” implying that he appreciates the doting attention of the eccentric Osgood. Joe is also changed by his transformation into “Junior,” the frigid post-traumatic millionaire. While he was always a two-timer and a low-life in romance, his commitment to the more refined character of “Junior” creates a change within him. When he is “Junior,” he doesn’t want to just leave Sugar flat, and takes the time to call her up and tell her that he has to leave. Jerry is surprised to see Joe behaving so civilly to a woman, citing the fact that he would never call a woman up to break things off. To this, Joe retorts, “That was back when I was a saxophone player!” Joe is, in fact, still a saxophone player, but his performance as Junior has had a kind of alchemical effect, rendering him a more decent human being. Even though Jerry is not an authentic woman, and Joe is not an authentic millionaire, their inhabitations of these respective roles change them.
Just when the viewer thinks that Joe and Jerry have abandoned their female disguises for good, the personas of “Daphne” and “Josephine” come in handy yet again, when they must escape Little Bonaparte and his cohorts. The confusion of identity and gender come to a head in the final sequence. Joe encourages Jerry to call Osgood in order to help them escape, before wandering downstairs in his “Josephine” attire, and taking his place in the band behind his one true love, Sugar, who sings a sad love song. He is so moved by the song that he kisses Sugar onstage, but she is still under the impression that Joe is “Josephine,” and is confused about why the seemingly same-sex kiss was so romantic. She is, after all, not very bright. Sugar’s ditziness, however, allows her to forgive Joe pretty easily for his deception, and she chases him out to the boat, hardly caring that he’s been dressed as a woman while simultaneously posing as a millionaire this whole time. Osgood is equally unfazed by Jerry’s admission that he’s a man, and not the gentle lady that he professed to be. Indeed, as the film suggests, “nobody’s perfect!”