Schmidt: Look at all this crap. Look at this. "Associated Strategies." "Ass Strat." What a joke. More like "Butt Strat." This place is total butt.
Nick: Hey, Jess, it's our sex mug.
Schmidt & Coach: What?
Jess: Oh... nothing. It's just a mug that Nick and I used for sex.
Coach: Oh, gross. Like, in it?
Schmidt: Ew! What?
Jess: No. No, we used it when we were dating. It was hard to find times to be intimate with everyone around, so we needed to come up with a code.
Nick: Just a way to let each other know we were aroused without arousing suspicion. That's wordplay. It's also a free writing lesson.