Hilmija has to juggle having Nazi commander Shiling moving into his inn, his scared Roma employee Durmis, suspicious Partisans looking for supplies and Chetnik spy Rugoba. All while his daughter is angry with him for collaborating.
Police chief Mustafa and Shiling make a plan to catch Valter. Valter brings two Partisans, one deaf and other one blind, to dig a tunnel and blow up the German's weapon's magazine. Azra prepares to leave for Partisans.
Durmis is left in charge of the inn for Hilmija's trip to Sabac. Shiling is concerned about the stolen nitroglycerin. Valter wants the two Partisans to speed up the tunnel excavation. Rugoba wants king Peter to stay over at Hilmija's inn.
Hilmija's at first hesitant to hide Rahela, a partisan Jew, at his inn. Digging of the tunnel is put on hold because of Nazi searches throughout town. Hilmija tries to warn Kresimir about Ana. Plan "Fake Valter" is resurrected.
Kresimir, Rugoba and Shiling are all depressed. And to lift the spirits, Shiling organizes Octoberfest in Sarajevo, with the help of his "friend" Ivica. Hilmija wants to become more intimate with Rahela.
Both Chetniks and Partisans want Hilmija to seduce Shiling to get intel. Since he refuses, Partisans send their volunteer, and he finds out about Azra. Shiling helps Ivica with his troubles with the law.
Hilmija tasks Krhki to train Durmis to handle being in the presence of Nazis. Hilmija tries helping Rahela get away from Nazi persecution; Shiling does the same for Ivica. Rugoba and comrade Crni fight for Shiling's affection.
Kresimir helps Mustafa identify gays with his test. Comrade Crni tries again to win Shiling over, but Rugoba doesn't give up either. Through some gender confusion, Ivica and Rahela get a crush on each other.
Shiling is furious someone stole the city defense plans, so Durmis pays the price. The tunnel under the inn is finished and Portugalac is preparing for an attack.
After miraculously fleeing prison, Durmis has to change his identity. Shiling puts up an award for finding Hagada, a priceless Jewish book. Partisans prepare to free Sarajevo during the celebration of Hitler's birthday.
