"Bart vs. Lisa vs. The Third Grade" is the third episode of The Simpsons' fourteenth season. It aired on November 17, 2002.
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The family is bored with the terrible reality shows inundating the (then) six major networks, so Bart has a suggestion: buy a satellite dish. The family earns the money to do this from Homer betting on a horse named No Risk and buys a satellite system with over 500 channels (one of which shows Tom Brokaw throwing up during the NBC live news feed). Homer and Bart get addicted to it, and Bart doesn't study at all for an important upcoming achievement test, even as Lisa is spending all her time preparing. During the test, Bart begins hallucinating, with all of his TV watching visions appearing in the classroom. Once the test is done, Principal Skinner announces the results at a school assembly: Not only does Bart fail the test and is DEMOTED to the third grade, but Lisa aces the test and gets PROMOTED to the third grade, where they meet their new teacher, Miss Audrey McConnell.
In class, Bart performs well on tests (having memorized the answers from his previous experience in the third grade), while Lisa has a hard time adjusting to the class. Their new teacher decides to clamp their desks together after Bart answers a trick question he had seen the previous year, thinking that Lisa needs Bart's help. Later, Bart gets an A on a map test while Lisa only gets an A-. Bart says that the test was easy and recites all of the answers to Lisa, which he had memorized from last year in third grade. Lisa proclaims that Bart cheated but the teacher did not hear Bart's recitation and tells Lisa to stop being jealous and changes Bart's grade to an A+. They are made field trip partners as part of the buddy system on a field trip to Capital City. When they are there, they hear that the flag for the state Springfield is an embarrassment (it contains a Confederate flag, despite the state being from the North), and their teacher assigns for homework an assignment to design a new flag. Lisa calls Marge as she designs her flag, which says "To Fraternal Love". On the phone, she complains about and makes fun of Bart, unmindful of the fact that Bart is overhearing the conversation on another phone and getting very angry about her comments.
The next day, Bart, Lisa and the other third-graders hand over their flag designs to the Governor (which Lisa points out that she made it herself). When the Governor sees Lisa's design, she starts to cry and displays the flag which now reads "Learn to Fart". This appalls Lisa, as Bart innocently admonishes her for making the Governor cry. Later, Bart again teases Lisa and they get in a fight and miss the bus heading back to Springfield (Lisa and Bart were buddies so the class left, since all the other pairs were accounted for). The fight brings them out of the parking lot and into the forest. As a result, the two wind up getting lost. Lisa tells Bart she's hurt by his behavior and Bart sounds somewhat apologetic, though he also adds in the interest of full disclosure that he wants to say he's sorry for using Homer's steamroller a while back to crush Lisa's bike, which he then blamed on Gypsies.
Back in Springfield, Principal Skinner informs Homer and Marge that Bart and Lisa are missing. He says that they will not spare any expense to find Lisa, and have already elected a Class Clown pro tem (Milhouse) in Bart's absence. They go to Capital City to find them, but Bart and Lisa are confronted by a family of hillbillies, who save them by driving them back to Capital City (they had planned to pick up the latest issue of Spy magazine, and are saddened to learn it's no longer published). Marge is ecstatic on seeing her children safe and sound. Principal Skinner, worried about the effects of placing Bart and Lisa in the same class, suggests that they return to the "status quo ante" - both Simpson kids go back to their proper grades. Everything is back to the way it should be, particularly the sheer contempt with which everyone views Milhouse after he tries to say "Ay caramba!" a la Bart.