Lynne is at her dresser in her underwear getting ready to go out. She tells George that she asked him to pick up her dress from the dry cleaners. She then says that she now has nothing to wear. George, who is dressed, hugs Lynne and says that it is just the way he likes it.
George and Lynne are about to go out. Even though Lynne knows her dress is still at the dry cleaners she has still decided to put her make-up on. Whether she actually thinks she will be going out in only her underwear we don't know. She may think that George is playing a cruel trick on her.
Lynne is trying to make George feel guilty for his trick by wiping away a tear and saying she has nothing to wear. She had her heart set on wearing that dress. All George wanted to do was hug his wife and now he's made his wife cry.
As his plan backfires, George knows he needs to get the pay-off sooner rather than later otherwise it would have been all worthless. So he grabs Lynne and squeezes and shakes her. Soon enough, Lynne gets a little scared and has to tell George to stop. It is awkward for a bit but it soon blows over.