George and Lynne at a dojo. George brings to the attention of Lynne that Kelly is giving a karate demonstration and is a black belt. Lynne is impressed and comments that she can look after herself. After the demonstration has finished, Lynne asks Kelly where Tom, her man, is. Kelly replies that she caught him dating another woman and gave him the chop. George is scared.
It is difficult to know the reason George and Lynne have gone to the dojo. Initially it seems that they are passing by and happen to notice Kelly but they have walked into the dojo and surely you need some sort of membership card for that. Neither of them are carrying a sports bag so they can't have been going for a lesson themselves. It appears that they have come to the dojo specifically to meet Kelly.
They have come to meet Kelly and, perhaps, her boyfriend for dinner. Lynne knows that Kelly has a man called Tom, but she does not know the recent news. This dinner was arranged a while ago and they have not spoken to Kelly since. During that time Kelly has caught Tom dating another woman and they have split. She did not just catch him seeing a woman but actually dating which means that she saw him on date with this woman on more than one occasion. It is likely that she saw him once with this woman but wanted to give him the benefit of the doubt but she was also worried so she followed him on another day when he met this same woman again, and was perhaps a lot more amorous with her. Her suspicions were thus confirmed and it was right to end the relationship.
Kelly must be someone that George is more acquainted with than Lynne. He knows that she works in a dojo and also that she is a black belt. This is the first time Lynne has experienced Kelly's talents and is obviously impressed. However it is George who is scared at the end when Kelly comes a little close and Lynne who finds the whole incident amusing. Lynne may find it funny that George is scared or that Kelly is doing something strange with her hands. Lynne is not au fait with eastern cultures and giggles in Chinese restaurants.