"Shawn and Gus in Drag (Racing)" is the fifth episode of season five. When a member of a gang of car thieves turns up dead, Shawn and Gus must infiltrate a drag racing ring to find the killer. Shawn soon finds himself enjoying the fast lane too much, which not only endangers the investigation but also their lives.
An expensive sports car is hijacked by a masked thief. Lassiter and Juliet get the call, and since Lassiter has been frustrated by his lack of progress breaking up a car theft ring, they decide to take lead on the case. The car thief they were chasing ends up shot dead somewhere along the route of the chase. Now they have a murder and a car theft ring to solve.
Back at SBPD, Lassiter is investigating the murder. Shawn gets a "vision" and tells Lassiter that the shooter was in a second car that had an altered VIN number. Juliet tells everyone that the victim's name is Max Contreras, who has had dealings with an exotic car dealer named Logan Paget. Shawn and Gus are on the case with Henry's blessing, as long as they stay under the wire while they snoop around the "Fast and Furious" world of streetcar racing. Lassiter is none too pleased with Shawn and Gus's involvement on the case, as he has been focused on cracking down on street racers for some time.
Lassiter and Juliet go to question Paget. Paget tells them that he hasn't talked to Contreras in weeks. He was the registered owner of the car that Max was driving. Paget claims the car was stolen, but Lassiter and Juliet question why he never reported it stolen.
Shawn and Gus show up at the garage where Max had previously worked on cars. There, they meet ultra-cool Tommy, one of the street racers. They ask when the next race is. Tommy doesn't let on, saying that Shawn and Gus wouldn't know the location because they weren't invited. So Shawn and Gus track down the location themselves. Shawn knows they need to be a part of the race to gain street cred, so he "borrows" Henry's truck and adds some nitros to it for extra speed. Shawn and Gus end up racing Tommy. And in turn, Tommy is impressed with Shawn and Gus's "guts," and the two end up being accepted into this close-knit group.
They work hard to figure out potential suspects and narrow it down to Gina, former girlfriend of Max Contreras. Lassiter and Juliet act on their own investigation and end up arresting Gina, whom they believe not only committed the murder but also could lead them to the head of the car theft ring. When they get back to SBPD, ballistics shows that Gina's gun was used to kill Max. But Shawn determines that it could not have been her that was the shooter because she had previously lost the ability to use two of hers fingers. Unfortunately, this forces Shawn to face that the murderer and leader of the car theft ring is Tommy, the cool guy that Shawn has bonded with. Shawn figures out that Tommy had murdered the thief in the beginning because he was trying to go independent and start his own car theft ring, and Max was just getting in the way.
At the same moment, Tommy realizes Shawn is working for the police, and Tommy informs Shawn that he is the one that is going to retrieve the sports car Max was driving out of police impound. Tommy is going to use the car to get away and to finally seek the ultimate thrill - hitting a speed of 200 mph. Shawn retrieves the car, and just as Tommy is speeding away in it, it is revealed that Shawn was clever enough to plan ahead. Turns out Shawn placed zucchini in Tommy's tail pipe. As the police are chasing after him, and as Tommy tries to speed up, the car gives out. Shawn's "vegetables in the tail pipe" foil works. Tommy is arrested for the murder of Max and for leading the car ring, and Gina is acquitted.
There is again a play on words in the title, involving drag racing, and the phrase 'in drag', used in the theater to describe a cross-dressing male actor playing a female character, usually with no serious effort made to hide the true gender of the performer.