Patrick hangs out with Clementine, and the situation is worse than we thought.
Patrick literally has all of Joel's mementos in his backpack, and he is referencing them to help along his relationship with Clementine. He even gives Clementine a necklace Joel bought but never had a chance to give her himself.
Back with Joel, Mary and Stan are smoking pot and dancing to music with fewer clothes on than they had before.
Mary is talking about how amazing Doctor Howard is for giving the gift of memory loss to so many people.