the ending starts (haha talk about ironic) when Schmidt was enraged to find his towel still damp even after being hung along bars, not hooked. So by yelling "DAMP! DAMMIT! EVERYBODY BATHROOM NOW!" he called for an unofficial housemates meeting.
Schmidt : Someone's playing the joke on me? Honestly. Why is my towel still damp?"
Nick : Coz it's not your towel. It's MY towel, Schmidt.
Schmidt : No it's not your towel. Your towel's the red one.
Nick : I tell you this pal. I never use that. I do use THAT one every single day.
Schmidt : Oh God..
Jesse (holding the red towel) : This towel's so warm and fluffy, it's like it has been in the sun forever.
Winston : This means you two have been drying your junk with the same towel.
Julia : Intimate...
Schmidt : Are you out of your mind?! How do you think that's your towel? Do you gonna wash it?
Nick : I do not wash the towel, the towel washes me (chuckled) Who washes the towel?
Julia : You never wash...?
Nick : You washes the towel?
Schmidt : You never wash the towel?!
Nick : What you're gonna do? Wash the shower next? Wash you bar soap? You gotta think here, pal!
Schmidt : I'm furious right now
Nick : I get out of the damn shower, I'm clean as a damn baby and I use the towel..
Schmidt : Let me ask you this. have you been wearing my underpants?
Nick : Sometimes, yeah. Who cares? (Schmidt's gonna puke) You guys don't wear each other's underpants? You're a liar. We all wear each other's underwear!
and credit rolls. wow, that's quite a test to my listening skill. so i'm gonna end this entry with Shcmidt and Winston's reaction to Nick's 'underwear' statement. haha.