Because this episode was aired out of order, the timeline actually jumps back to 1976, even though the previous episode took place in 1977.
In a rare tender moment while reminiscing, Red reveals that his mother was the first person to call him "Red," finally giving the audience a backstory for his nickname. [S1E23] Grandma's Dead
Meanwhile, the rest of the Forman house is in its usual state of semi-functional chaos: Because this episode was aired out of order,