Katie's birthday cake was special because it was a King Cake! The King Cake has a tiny plastic baby baked into it, and whoever finds the little baby in their piece of cake is declared The King (or Queen) of the party and that means that WHATEVER they say, goes! Ahhh, the possibilities.
...Ellen's friend Terry! None of us really knew Terry that well - so after he found the baby in his piece of cake, people started explaining to him that since he was THE KING, everyone at the party would have to obey his every command or face PARTY BANISHMENT!