Tracy and Krystle exchange angry words. As Alexis monitors all of the television news programs, Mark suggests she's waiting to see some late-breaking news-news she already knows. Blake learns Kirby has unearthed the truth about her father and is anxious to demonstrate he only lied to fulfill Joseph's wishes. As little Blake's birthday party gets underway, Krystle tells a stunned Alexis that she is expecting a baby. Alexis recovers quickly and dismisses Krystle with the fact that she's been through four pregnancies. Krystle catches the slip, and Alexis explains one pregnancy miscarried. Fallon and Jeff announce their plans to remarry. The Carringtons are stunned to hear that Rashid Ahmed has created an international incident by announcing that Blake is planning a military attack on another world power involved in the China Seas oil deal.

Krystle launches her new business with the purchase of an Arabian horse. Sexual tension between Steven and Luke mounts. Jeff and Nikki return from Bolivia with the news of their marriage and they move into the mansion. Alexis is intrigued with Blake's recent meeting with a delegation from China. It was arranged by Lady Ashley Mitchell, an internationally known photojournalist and widow of a wealthy British lord. After Lady Ashley and Blake enjoy a lovely dinner together, she impetuously kisses him.

Alexis attempts to persuade King Galen to allow a marriage between Amanda and his son. She sweetens the offer by suggesting his country would receive a portion of Colbyco's revenues. Finally, she takes him to bed. Steven tells Claudia that although he still loves her, he is now certain he also loves Luke. Dominique advises Krystle to reconcile with Blake or risk losing him to Ashley. Lady Ashley impulsively kisses Blake and the moment is photographed and sent to Krystle.

Blake pays $5 million for the release of Krystle and Alexis, and the families return to Denver from Moldavia. Steven delivers a moving eulogy at Luke's funeral. Claudia comforts him and incurs Adam's wrath. Rita's boyfriend Joel, a wheeler-dealer film director, is enthusiastic about Sammy Jo's impersonation plot--and the money to be made. Dominique is stunned to find Alexis is no longer interested in fighting over the Sumatra Timberlands sale. She's preoccupied with worries about Galen in Moldavia. Krystle finds Sammy Jo redecorating Delta Rho Farms and demanding Krystle release more money from her trust. Michael rebuffs Blake's offer to help him begin life anew in Denver. Fallon tells Miles Colby she is suffering from amnesia.

Rita panics when Blake tells her that he's made an appointment for her to see his physician. Dex becomes disgusted with Alexis as she pampers King Galen. Galen tells Michael that his marriage to Amanda was arranged, strengthening his own plans to regain the throne. Michael demands that he and Amanda start planning a family. Blake is enraged when Rita, posing as Krystle, runs away from his romantic advances.

Galen plots to regain his throne while Elena, learning the counter-revolution is in jeopardy, solicits Michael's help. A mysterious woman visits Denver to conduct extensive research on Colbyco. Carress Morell, a journalist, is Alexis' sister. Alexis, noting Blake's loss of faculties, is ready to pounce. Adam forces Blake to grant him power of attorney. Adam boasts to Claudia, but she is suspicious, and continues her attempt to prove rightful ownership of the oil well. Sammy Jo learns that Joel and Rita plan to poison Blake and flee to South America with Krystle. After much soul searching, Sammy Jo warns Steven, but it may be too late. Steven arrives at the mansion just as Blake, stricken with an apparent heart attack, falls down the stairs.

When Joel intercepts Krystle and Sammy Jo at Delta Rho, Krystle pretends to be Rita and escapes. Rushing to the hospital, she is finally reunited with Blake. The two receive a grand welcome home, but Krystle is haunted by nightmares of Joel. Blake vows to capture the fugitives. While attacking Joel, Rita steers their car over a cliff. Both are thrown clear and reconcile in Rio de Janeiro, only to plot a future impersonating scheme. Alexis plots Krystle's demise by publishing the kidnapping story with added ""facts."" A neglected Dex attempts to force Galen to walk and consults doctors who can prove the king a fraud. Elena turns to Michael when her father is killed. A jealous Amanda approaches Dex for love and revenge. Dominique's daughter, Jackie, returns from Europe. Claudia calls to Dr. Edwards and plans to re-establish her oil well.

A crisis in Hong Kong sends Blake overseas, leaving Krystle to speak beside Alexis at the co-company dedication. When Alexis publicly denounces Blake's character, a vicious argument ensues and lands the two enraged women in the mud. Although Bart and Steven cannot agree about the pipeline particulars, they are in mutual accord with their affections. Bart secretly admits that he and his old roommate were lovers, not knowing that a private investigator, hired by Adam, is also privy to the information. Garrett questions a nervous Dominique about Jackie's father. His suspicions grow when Dominique refuses to answer. Alexis learns of Ben Carrington's isolated existence in Australia. With vengeance as her inspiration, she lures the recluse back to Denver, hoping to pit the estranged brothers against one another. Upon her return, Alexis receives a housewarming gift that turns her blood cold; Caress has moved in.