This is season 4, episode 2 of Disney Channel's Wizards of Waverly Place.
In this Wizards of Waverly Place episode, Alex Gives Up, Alex decides to drop out of the wizard competition because she doesn't believe that she can catch up with Max. Unfortunately, dropping out of the wizard competition means that she and Mason can no longer be together because non-wizards and werewolves cannot date.
This Wizards of Waverly Place episode begins with Max (Jake T. Austin) asking Jerry (David Deluise) if he can use magic to take the garbage out. Theresa (Maria Canals Barrera) protests, but Jerry argues that a little practice can't hurt. Max uses his wand, but makes a mess of the spell, causing trash to splatter everywhere.
Justin (David Henrie) applauds Max, the Russo family wizard, out of sarcasm when Alex (Selena Gomez) and Mason (Gregg Sulkin) enter with an important announcement. Alex has decided to drop out of the wizard competition. Justin sarcastically applauds her as the Russo family quitter.
Alex explains that since she is so far behind Max, she would rather just drop out so she can focus on her relationship with Mason. Mason, in turn, plans to give up many of his canine urges such as "rolling around in this delightful trash."
At the counter, Harper (Jennifer Stone) pens a romance novel about a witch who gives up her powers for a werewolf.
Later, a wealthy family appears at the sub station looking for Max. They turn out to be a family of Cucuys, a family of Latino mythical creatures who were used to scare children into behaving well. Their daughter had seen Max on the cover of Future Wizards magazine and wanted to meet him.
Jerry explains to Theresa that the Cucuys are filthy rich and that it has always been a dream of his to hang out with the filthy rich. Theresa asks the Cucuys why they aren't as scary in person. The mother says that she had put Theresa to sleep with a scary face back in the summer of 79. Theresa runs in terror.
Seeing Max on the cover of Future Wizards has made Justin more determined to get back in the wizard competition, but not before he draws a silly mustache on the magazine cover.
Lisa Cucuy approaches Max and tells him that they should date. He asks if she would let him wear a viking helmet and she says no. Max is at first uninterested until she shows him a scary face (which he thinks is so cool).
Meanwhile, Justin makes his way to the Wizard Family Competition Commissioner's Office and meets Helen (Kari Wahlgren). Helen is at first reluctant to help Justin because he had exposed magic, but after he flirts with her, she offers some community service programs to help him regain his standing in the wizard competition.
The current jobs available are centaur stable cleaner, wizard grave digger, or tutoring a class of delinquent WizTech students. Justin claims he was born to shape young wizards' minds. Helen gives him the stamp of approval and informs him that the students will be at the lair tomorrow.
Back at the sub station, Max keeps asking Lisa to show him the scary face. She's tired of it because she's shown him the face 18 times. Lisa's parents show up to invite Max to their yacht for a dinner party. Jerry talks them into taking the whole Russo family along.
In the living room, Alex and Mason are watching a movie while Harper is penning their romance novel. Chancellor Tootietootie poofs in with some bad news. Now that Alex is out of the competition, he tells her that werewolves and mortals are prohibited from dating. The reason is that werewolves always end up eating the mortal in anger. Alex and Mason sadly realize that they have to break up.
Tootietooie is about to leave when Jerry pops in and mentions the yacht party. Alex decides to invite Tootietootie to the party. He's thrilled to be going to a Cucuy party. Harper realizes that Alex is trying to bribe him into bending the rules for her.
At the lair, Justin is having a tough time teaching the delinquent students. A hulky guy walks in late and gives Justin a tough time, even ripping his sleeves.
On the yacht, Jerry is brown-nosing with the Cucuys while Theresa is terrified of them. Alex and Mason show Tootietootie what a great couple they make, and he decides to overturn the ruling. Lisa spots them together and decides that she wants Mason instead of Max. She has a thing for werewolves.
At the lair, Justin demonstrates an ancient teaching device where whatever he draws materializes. He draws and fish and it comes to life. Felix, the hulky guy, wants to try it. Justin is thrilled that his student is interested until Felix draws a bell and yells, "school's out!" The entire class leaves.
At the yacht, Lisa asks Mason to be her boyfriend. Lisa explains that Cucuys are usually terrified of werewolves, but she isn't. Alex threatens to show Lisa a "feisty werewolf." Alex decides to publicly embarrass Mason by revealing secrets about him. Jerry laughs along with the Cucuys because when rich people laugh, you laugh along with them.
As Mason reacts in anger, he turns into his werewolf form, the Cucuys are scared. The Cucuys reveal their scary faces, and Theresa runs in terror. The Cucuys jump in the water, followed by Jerry. Max jumps into the water just because he feels like swimming.
Alex threatens Lisa, "you can go the easy way, or my way." Lisa obediently jumps into the water. After seeing Mason scare everyone, Chancellor Tootietootie realizes that it is simply too dangerous for werewolves to date mortals. He changes his mind on the ruling.
Mason asks Alex why she ruined everything. Alex explains that she was jealous and trying to fix everything. Alex and Mason realize that they have to break up, and decide to be close friends. Harper, penning her novel, is happy with her tragic romance.
Back at the lair, Justin laments that he's not cut out for teaching. Helen consoles him by asking him to reconsider the centaur stable gig. Felix walks in and thanks Justin for teaching the abracadoodle thing.
Felix tells Justin that he's doing a good job, and that his mother is too. Justin returns the favor by telling Felix that his mom is doing a good job too. Felix takes it as an insult and rips Justin's sleeves. Justin is upset because he had just sewed them back on.