My opinion is just bite the bullet and spend the money and have sod put down. I know it will cost more in the begining, but you will have an instant lawn. And not have to worry about raking, then seeding, then having to put straw down so the birds don't eat your seeds, and then having to rake out the straw once the grass starts to grow, then dispose of the straw. Then you have to hope that you don't have bare spots, which will require reseeding, possibly more straw and on and on and on. ( I speak from experience ). And as far as lawn plugs, do you really want to do all that bending over? Just my thoughts, but what ever you do, take pictures before and after so you can see what a great transformation your lawn has taken.
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