a transvestite (shortened to 'tranny' in the scene) is a person, typically a gay man, who derives pleasure from dressing in clothes appropriate to the opposite sex.
He is said to be 'in drag'.
a 'cross-dresser' is someone who dresses in the clothes of the opposite sex and would be applied to a woman dressing as a man, and a non-gay male who likes wearing female attire.
(transgender is a person psychologically identified with the gender other than their biological one , and may pursue surgery to change the physical features to those of the other sex.)
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