James tries to reassure Ellen that the fight wasn't her fault; they've needed to have that conversation for a while, and now he knows where they both stand.
Ellen wonders whether it's the sex that makes you gay, or the relationship.
James gets them shots of Sambuca and they talk about what it means to be gay.
James surmises that Link doesn't know whether he's gay, but he's scared of the answer, and that's why he gets so mad. James doesn't know whether he's gay either, but he's not scared of it; James slept with those men just to annoy Link.
Ellen guesses it wouldn't annoy Link if he weren't gay. However, he can't outwardly say it hurt him, because that would be confirming he's gay. Poor Link is stuck between a rock and a hard place.
James likes girls, too, so he's not sure if he's gay—he's just not afraid of it either way.
Ellen decides to go home. James gives her cab money because Ellen and Link never have any money since their allowance gets "taxed" by their dad so they have savings for Christmas and birthdays.
Ellen relays James's message to Link that he's sorry. Link just gets angry all over again, though. He doesn't want to talk about it, and he's not a "couple" with James, end of story.
Link tells Ellen that Adena leapt to conclusions about them being gay because her father is gay. Muy interesante.