 The series depicts the everyday lives of office employees in the Scranton , Pennsylvania branch of the fictional Dunder Mifflin Paper Company . In this episode , Michael Scott ( Steve Carell ) , after being embarrassed by Dwight Schrute 's ( Rainn Wilson ) superior fighting skills , engages in a karate match with Dwight during lunch . Meanwhile , Jim Halpert 's ( John Krasinski ) flirting with Pam Beesly ( Jenna Fischer ) goes too far . 
