Jane saves Jake and Alison from the fire. Jane apologizes for her outburst, but later tries to seduce Billy to make the couple jealous. She also makes crank calls and throws a brick through Jake's window. Jake believes Billy is responsible, and assaults him when he and Samantha return from a date. Amanda is annoyed when Taylor and Kyle just happen to show up at the same Palm Springs hotel where she and Peter are spending their honeymoon. Arthur Field gives his son, Craig, a job at D&D. Billy overhears them plotting to destroy Amanda. Billy decides not to share this information after she bows to Arthur's edict and demotes him. Sydney is smitten with Kyle. When he expresses interest in one of Sam's paintings, Syd claims to be the artist's agent. Kimberly is emotionally unable to sleep with Michael. He meets an attractive woman while jogging along the beach. Matt checks into a rehab facility, where the head doctor takes interest in him.

Jane slashes Alison's tires. Jake catches Jane following Alison and him, and orders her to stop stalking them. Jane files a restraining order against Jake. Sam pushes Billy away after Jane shares details of his past, but Billy is able to win her trust. Amanda denies Craig's attempt to undermine her in front of a client. Amanda becomes annoyed when Peter neglects his job and begins hanging out at Kyle's restaurant and drinking heavily. Michael sleeps with Megan, the woman he met while jogging. Sydney tells Kyle that the artist she represents is a Russian immigrant named Samuel Kirov, and offers to sell him the painting. Samantha reluctantly agrees to this deception. Matt is thrown out of medical school, and suspects that the doctor at the rehab facility, Dan Hathaway, squealed on him. Dan tells Matt that the classmate who got him hooked ratted on people after he was busted. Dan helps Matt get back into school after he agrees to counseling.

Amanda and Peter continue to fight constantly. Peter decides to stay with Michael and Kimberly for a while. He spends one night on the McBrides' couch after drinking heavily. While he is sleeping, Taylor stares at him and talks about how much she missed him. Amanda rents the restaurant for the night and reconciles with Peter. When Jake refuses to respond, Alison confronts Jane about her loony behavior. Megan insists that Michael doesn't need to know anything about her. Kimberly undergoes an MRI to determine the cause of her headaches. Kyle comforts Sydney after she has a disastrous blind date with an acquaintance of Samantha's. Matt expresses a romantic interest in Dan.

Taylor reveals that she is the younger sister of Peter's late wife Beth. She hangs out with Peter while Amanda is away on a business trip, and helps him pick out a ring for her. Samantha gives Billy the brush-off after he laughs about Jake and Alison's problems. She begins dating Craig. Michael learns that Megan is a prostitute. Kimberly is diagnosed with an inoperable brain tumor. Michael vows that he will take care of Megan. After Michael leaves Megan's house, Kimberly arrives to discuss their ""arrangement."" Jake confronts Jane and emphasizes that their relationship is over. She realizes that she was taking her anger toward Richard out on him. Matt gives Dan the credit for his improvement at school.

Kimberly orders Megan to stop ""servicing"" Michael, but he refuses to stay away from her. Michael cuts off Megan's relationship with her clients. Kimberly tells Megan that she is dying, and asks her to take care of Michael. Michael asks Peter to recommend him for chief-of-staff, but Peter decides to apply for the job. Kyle forbids Taylor from seeing Peter. Alison takes a temporary assignment at D&D, much to Jake's chagrin. Jake offers to make her a partner in Shooters. Craig tries to move too quickly in his relationship with Samantha. While snooping through his father's files, he discovers that he holds a controlling interest in D&D. A disoriented Jane decides to go home to Chicago for a few days. Dan suggests that he and Matt slow down their relationship.

Craig takes the reins of D&D. Arthur pays Amanda to keep an eye on Craig so that the business can stay afloat until he resumes control. Kimberly pretends to catch Michael with Megan, and tells him she is filing for divorce. Jane learns she is adopted (and Sydney isn't) after she tries to donate blood before her mother's gall bladder surgery. She discovers that her birth mother lives in Los Angeles. Sam gives a painting to Craig, and he uses it to taunt Billy. Taylor consoles Peter when the patient in his first surgery since his arrest dies of post-surgery complications. He later freezes in the operating room. Kyle is furious when Taylor continues to spend too much time with Peter. Kyle sleeps with Sydney when she stops by the restaurant at night to deliver a painting. Matt becomes suspicious of Dan's controlling behavior. Jake is hurt when Alison doesn't jump at the chance to become his business partner.

Kyle rejects Sydney and vows to make his marriage work. Jane also pushes Syd away as she searches for her birth mother. She learns that her mother is a former actress named Sherry (Larson) Doucette. Alison seeks Billy's advice about her problems with Jake. She decides to serve as Jake's apprentice for a year before she considers whether to become a partner. Kimberly serves Michael with divorce papers. Arthur tries to legally contest the transfer of Craig's stock. Craig impresses Sam by renting her a studio to pursue her painting. Peter develops a fear of surgery. Dan is confronted by a former patient and lover during a dinner date with Matt. The man warns that Dan is a control freak.

Kimberly rejects Michael's final attempt at a reconciliation. He decides to stay with Matt for a while, but Kimberly urges Megan to get Michael back. Dan pressures Matt to move in with him. Peter turns to golf to lift his spirits when he fails to win the chief-of-staff position. Amanda puts up with his behavior, until he loses a large bet over a golf game to Kyle. Taylor convinces Peter to join her in lighting a candle in Beth's memory on the anniversary of her death. She reveals that she forged the final entry in Beth's diary so that Peter would be cleared. Arthur calls off his lawsuit when Craig threatens to reveal a family secret. Samantha abandons her studio when she realizes that Craig is expecting something in return. Sydney takes a second job as a hostess at Kyle's. Sherry meets with Jane at a mansion, and asks that she seek no further contact. Jane later discovers that Sherry actually lives in a small apartment, and tries to reach out to her mother.

Sydney resents Jane's new relationship with her mother. Sherry lies about the identity of Jane's biological father, but later reveals that he was a producer with whom she had slept to win a part. Amanda and Craig take a business trip to Palm Springs. When Peter arrives to surprise Amanda, he finds her having dinner with Craig and wearing a pearl necklace. Peter refuses to listen to her explanation, and trashes the restaurant. Amanda throws him out of the apartment. Taylor decides to donate one of Samantha's paintings to a charity auction. Sam (who hasn't received any money from the sales) tries to buy it back, but Sydney bids on the painting to drive up the price and make Kyle look generous. Sydney is in a bind when she accidentally buys the painting, and hopes that the man who bid against her will take it off her hands. He is actually an employee of computer genius Carter Gallavan, who buys the painting and takes a liking to Syd. Billy retrieves the painting that Sam gave to Craig. Bi

Michael tries to reunite Peter and Amanda in the hopes that Peter will again make a contribution at the office. Kyle tries to play matchmaker at his birthday party, but Amanda isn't ready to talk to Peter. Peter regains his confidence when he witnesses an accident and saves the driver with an emergency tracheotomy. Carter gives Sydney a beautiful sports car, but is too busy to spend time with her. Samantha sleeps with Billy after he secretly buys a bunch of her paintings to try to help her make it to a family reunion. Michael is reluctant to sign the divorce papers. Kimberly convinces Megan to take Michael to Las Vegas in the hopes that he will marry her. Sydney confronts Jane when her sister rejects the Andrews family to spend all her time with Sherry. Sherry's boyfriend Ed tells Jane that her mother is an alcoholic, and has begun drinking again because of her guilt about giving up Jane. Dan becomes physically abusive toward Matt.

Michael signs the divorce papers, and marries Megan during their trip to Las Vegas. Peter learns that Kimberly has a brain tumor, and breaks the news to Michael. Jane is robbed at gunpoint at the boutique. Sydney calls her parents, who come to Los Angeles to comfort Jane. Jane decides to go home to Chicago for a while, and agrees to stay in touch with Sherry. Sherry and Ed get engaged. Jane turns the boutique over to Syd, and says goodbye to her sister and friends at the airport. Alison learns that she is pregnant. Amanda gets Craig drunk during an evening out. He reveals that Arthur murdered Craig's grandfather when Craig was twelve. Matt agrees to move in with Dan. When Jake and Billy become suspicious of Matt's black eye, Dan accuses Matt of betraying him. He assaults him again. Sydney pushes Carter away when he still cannot find time for her. His assistant, Walter, tries to pay Syd to stay with Carter.

Michael insists on spending time with Kimberly after learning of her terminal illness. She reveals to Megan that she will crash her car during the next rainstorm. After it begins to rain, Megan forces Michael to drive her to Mulholland. She tells him the entire story of her relationship with Kimberly. Their car crashes into Kimberly's and flips into the air. Walter secretly pays a bill for Sydney after Taylor refuses to let Kyle bail her out. Sydney tries to tell Carter about Walter's behavior, but he interrupts to reveal that he wants a relationship. Amanda uses Craig's revelation to blackmail him. When Arthur learns that the secret is out, he confronts Craig and Amanda. He agrees to pay them five million dollars, but Craig tries to strangle his father. Arthur suffers a fatal attack. Jake and Alison get engaged. Peter threatens to ruin Dan's career unless he seeks counseling. Dan confronts Matt, who stops him from driving drunk. Dan apologizes and agrees to seek treatment.