"Lorelai's Graduation Day" takes place shortly after the events of "Teach Me Tonight." Appropriately enough, it centers around Lorelai's graduation from business school. She only wants to invite Rory, Sookie, and Jackson (Jackson Douglas). But Rory believes this is a milestone that requires an extra special celebration, so she secretly invites Emily and Richard.

However, on the day of the big event, Rory can't stop thinking about Jess, who called her the night before from New York. She's still dating Dean at this point, but Rory feels the overwhelming urge to cut school and take the bus to New York to see Jess, bailing on her mom's graduation ceremony in the process. Jess gives Rory a local's tour of New York, complete with corn dogs, record stores, and subway rides.

At the graduation ceremony, Lorelai is shocked to find her mother setting up professional camera equipment to capture her daughter's big moment. For viewers, the sight of Richard and Emily's sincere and substantial pride in Lorelai's accomplishment is quite a heartwarming moment. For the rest of Lorelai's graduating class, there's nothing worse than having their moment co-opted by rich people with fancy cameras. The discovery that these people are Lorelai's parents does not endear her to her fellow business school grads.

After receiving her diploma, Lorelai returns home and finds Rory sitting outside their house. She readily admits skipping her mom's graduation is one of the worst things she's ever done. Lorelai's understandably upset, but she puts her disappointment aside to spend the rest of the evening celebrating her big achievement.