Nanette arrives in Atlantic City and quickly becomes the most popular girl on the beach ("Peach on the Beach"). Meanwhile, Jimmy crosses paths with his three girlfriends, who confront him with the promises he made to them ("The Three Happies"). Tom meets up with Nanette, and they resolve their quarrel, fantasizing about being happily married one day ("Tea for Two"). Lucille runs into Billy, and though she is surprised to meet him in Atlantic City, she assures him that she does not mind whether he spends time with other women as long as she's there to watch – and he comes home with her at the end of the evening ("You Can Dance with Any Girl At All").