After a random encounter in Tel'Adre where you see a gang of cat morphs "attacking" another in an alley, you go through a scene (if you decide to help) where you are knocked unconscious by a trap sprung by these cat morphs. You are left in the care of Katherine, a cat morph with a dog cock complete with an enormous knot. Katherine tells you about the gang, that they never steal too much, only what they need to get by. You gain the upper hand by offering milk (if you are lactating) and break free.
At this point, you are offered a variety of choices, whether to help Katherine and show interest in her dilemma or to reject her altogether. [Updating Needed]
Should you choose to take an interest and help her out, you will come across the same gang pulling their stunt again, but this time you are ready for it. Stopping short of the trap, you call their leader, Evelyn, out. You can talk, help or threaten. Any way, you get to speak to Katherine again and take her out on a date where she orders a milkshake. After, addressing the issue where she seems ashamed of her hermaphroditic body, and "wrong" male part, you seem to have no other option with Katherine at this point but to make her "feel better" about it by giving her a handjob. She becomes more comfortable with you and afterward, tells you where she is staying; in the alley behind the pawnshop thereafter known as "Katherine's Alley". This is where you will interact with her until you get to the point where she gets her own apartment. (Select the pawn shop and it will have the option for Katherine's Alley)