Lt. Neil Fogarty, always living on his nerves, is made even more nervous by the fact that he must run the morals department of the New York City police while his boss, Captain Chung, lies seriously injured in hospital. His team is made up of wisecracking second-in-command Val Vandergroot, sexist slob Ken Schuler, busty blonde Corinne O'Boyle, who frequently ends up having to pose as a hooker, tough street cop Mickey Crawford (who is also Val's ex-boyfriend), by-the-book university graduate Darnell 'Shag' Ruggs, dim-witted mama's boy Richie Biondi, and gay civilian aid John Irvin, newly transferred from the 15th precinct (of NYPD Blue). The squad faces a tricky case when trying to catch the patrons of a bar selling alcohol to minors.
Corinne breaks up with her boyfriend, Buzz, after Val arrests him for soliciting. Val then suspects that Mickey wants to move in on Corinne.
Ruggs turns up to work without his pants and explains to Lt. Fogarty that a nine-year-old boy, Robert, mugged him. Fogarty, who is on a cheese-only diet, becomes obsessed with a strange smell in his office until Ruggs realizes it's the lieutenant who smells. While Richie is persuaded by John to see if Richie's dog likes his so the two pets can have companionship, Schuler gets a date through the personal ads. All seems to go well until, walking home, she demands Schuler's shoes at gunpoint.
The squad accidentally raids room 5C of a tenement building before breaking up an illegal Korean gambling den next door. Some of the confiscated money subsequently goes missing. While Fogarty is acting strange due to terrible flu, Richie goes to his priest to admit that he genuinely mislaid $1,000 from the gambling den haul but, being from a family of cons, he is afraid no one will believe him. He is persuaded to tell the truth and returns to the squad room, only to find that everyone knows about the error.
Corinne clashes with Fogarty when she lets go a paraplegic who was caught soliciting during a sting operation. Fogarty, Schuler and Biondi pose as salesmen in a hotel room in the hope of exposing escort girls as prostitutes. The operation is ruined, however, when one of the girls inadvertently mentions a codeword ('Mary Chapin Carpenter'), which causes the other morals officers to rush in before an offence has been committed. Then the paraplegic turns up at the hotel room, saying that he's heard about some action, and exposes himself to Val. Back in the squad room, Schuler wonders if Val is a lesbian. Then a woman enters and Val rushes over to kiss her. The 'woman' turns out to be new squad member Mickey Crawford, fresh from TV (transvestite) patrol, who used to be Val's boyfriend.
Schuler and Corinne pose as a married couple looking for extra-marital kicks at a brothel, which results in the arrest of its madam, Ashley. She turns out to be the girl Schuler worshipped from afar at high school and he is made to think she'll go on a date with him in return for preferential treatment. Mickey feels he's not being treated as one of the team.
Crawford and Ruggs think they've spotted a porn peddler on the street when the man offers them something strange and exotic. It turns out that he is selling llamas. John hosts a sexual harassment seminar in the office. Richie Biondi prepares for his brother Carmine's bachelor party. Schuler obtains some confiscated sex toys from the evidence room for the celebration but they are accidentally sent to Fogarty's wife. She is later reported to have been very pleased with the gift. During Carmine's party, a llama is delivered unexpectedly.
Richie's brother Tony is arrested for illegal gambling. For once, Richie decides not to help get Tony out of jail before his sentencing, much to his mother's annoyance. Fogarty doesn't know what to do when his second, younger wife says she wants to have a baby, which prompts the rest of the squad room to discuss the pros and cons of parenthood. Schuler is driven crazy by John's exotic brews of coffee.
The morals officers accidentally expose a vice squad undercover operation. After Mickey overhears a phone conversation, which says that someone is going to be 'whacked' (i.e., transferred or fired) for the mishap, everyone is afraid for their jobs. It later turns out that one of the vice squad undercover cops was crooked and exposed the operation. As the morals officers watch a TV report about the crooked cop's arrest, a cleaner arrives to say that someone called to have the squad room's floor 'waxed'.
Val and Corinne go undercover at the upscale Amalfi Hotel where Val spots her favorite children's author, Stanley Rudolph, who propositions Corinne. Val is upset by such an action from a childhood idol and can't stop crying. As part of 'Bring Your Kid to Work Day', Ruggs's daughter Gretel visits the squad room. Val then feels even worse when Gretel overhears Val say that Santa Claus doesn't exist. It's left to Fogarty to resolve the situation.
Fogarty finds that his office is too hot and tells Mickey to join him on the precinct building's roof for a chat in the snow. Fogarty admits that Mickey reminds him of himself as a young man and wonders if Mickey would like to go on a date with Moira, his grown-up daughter from his first marriage. When Mickey sees that Corinne seems attracted to Richie, he agrees to go on a blind date with Moira. They meet at the cops' hang-out, Angelo's, where Schuler has also arranged for his estranged wife's new boyfriend, an Englishman, to be questioned informally by Val to see if the man will flirt with Val or remain faithful to Schuler's wife. The Englishman shows no interest in Val and Moira thinks Mickey is a jerk. As Moira leaves Angelo's, she bumps into the departing Englishman and the two are immediately attracted to each other. Val and Mickey console each other over coffee.
Fogarty arrests veteran prostitute Vivian La Rue. While interrogating her, he seeks some advice after admitting that the pressures of acting as captain is making it hard for him to satisfy his sexually demanding wife. A few days later, he announces to the squad room that Captain Chung has died in hospital. He is now gripped by even more nerves about giving the eulogy at Chung's funeral and the prospect of becoming captain. He eventually rises to both challenges and is able to report to Vivian that his wife is happy too.
While John and Mickey are ordering lunch in Mario's deli, an elderly armed man enters and tries to rob Mario. Mickey is too busy deciding what to drink to notice the situation but John manages to talk to the man and disarm him. Back in the squad room, despite Mickey's protestations that John was the hero of the hour, everyone else believes that Mickey must have disarmed the robber and is just being generous. John later receives a special commendation from the mayor's office and becomes a local celebrity after Mario reports his brave act to the papers. This newfound celebrity goes to John's head and he alienates the rest of the squad, especially Mickey who now feels that his tough reputation among his colleagues has been undermined. With Fogarty now officially in charge, he wants his detectives to look smarter and persuades slovenly Schuler to see John's personal shopper, Darren. Ruggs and Biondi, meanwhile, are divided over whether a nude act at the Hornet's Nest club is obscene or leg