3x20 - Say Goodnight, Gracie
Both Rory (Alexis Bledel) and Jess (Milo Ventimiglia) avoid one another when they find it difficult to deal with their emotions after the fight at the party. When Lorelai (Lauren Graham) and Sookie (Melissa McCarthy) learn that the owner of the Dragonfly Inn has passed away, they see their chance to buy the inn of their dreams. Jess' long-lost father, Jimmy (Rob Estes, "Melrose Place"), shows up in Stars Hollow and introduces himself to Jess, then suddenly leaves town. Luke (Scott Patterson) is furious when he learns Jess has flunked out of high school and gives him an ultimatum to repeat his senior year or leave.