Alison's roommate leaves in the middle of the night and sticks her with the rent. The goofy Billy Campbell approaches her and asks about the vacancy, but she turns him down. Faced with eviction, she finally takes him up on his offer. Alison accidentally dents the car door of a vice president at the ad agency that employs her, D&D. She accepts a date with him, but Billy has to come to the rescue when the man tries to force his way into the apartment. Jake attempts a relationship with Kelly Taylor, a teenager whose house he had helped remodel. They are constantly faced with obstacles due to their age difference. Rhonda is pursued by one of her aerobics students, but learns that his interest is anything but romantic.

Billy gets a job as a cab driver. He makes a connection with a passenger, and they quickly begin dating. Alison is put off by the speed of the couple's courtship, and grows tired of Marcy's constant presence in the apartment. Billy, Michael and Jane all accuse her of jealousy, but she denies it. Billy soon has second thoughts about his relationship when Marcy tells his friends intimate details about their sex life, and quickly declares her love for him. Billy tries to avoid her, but Jake advises him to confront Marcy to break things off in person. Jake is arrested following a scuffle at the unemployment office, and is less than grateful when Kelly bails him out. Jane worries about the status of her marriage when Michael is unable to recall the specific moment he fell in love with her.

Jake fears that Kelly will be hurt if they continue their relationship. He sets up a fake date with a friend and rubs it in Kelly's face to trick her into breaking up with him. Jane is depressed when Michael must work instead of spending a romantic evening with her. Jane loses her wedding ring during a girls' night out with Rhonda. Billy completes his first screenplay, but Alison is decidedly less than impressed.

Alison is befriended by a guy from the mail room, who quickly asks her out. He reveals that his father is the vice president of a sunscreen company with which D&D is doing business. She makes a suggestion for the campaign, and is enraged when Rick steals the idea and pitches it to Lucy, her boss. Alison tells Lucy what happened, but she is afraid to do anything because of possible repercussions from Rick's father. Lucy gives Alison the chance to work on the campaign, and Alison develops a new ruthless attitude that she later comes to regret. After failing miserably in his new job at a coffee shop, Jake agrees to help his ex-girlfriend Peri with the sale of a fraudulent painting. He backs out of the deal after catching Peri using drugs, and later lands a job as a mechanic. Matt questions Rhonda's character after she reneges on a promise to help with a dinner at the halfway house.

Jane learns that she is pregnant, but doesn't tell Michael because he hadn't seemed thrilled by the prospect of having kids. She tries to get an abortion secretly, but changes her mind. Michael is furious at Jane for keeping him in the dark, until the joy over their child brings them back together. Billy is given a column in the neighborhood newspaper. He can't come up with a topic because his life is boring. Hoping to alleviate this problem, he convinces Jake and Matt to go bungee-jumping with him. After he is unable to go through with the jump, Billy writes a column about ""wimping out.""

Jake asks Alison to help him study for his G.E.D., but requests that she keep the matter a secret. The building is filled with gossip after Alison is seen sneaking out of Jake's apartment after an all-night study session. Billy and Sandy become jealous. Jake and Alison share a kiss, but decide to just remain friends. When Rhonda meets up with an old friend from her dancing days, she is haunted by memories of the injury she faked to avoid an audition. After Rhonda learns that a spot has opened in her friend's dance troupe, she is determined to redeem herself. She nails the audition, but decides that she's happy with her current life.

Billy is depressed when the Melrose Times folds. He asks Alison to accompany him on a visit to his parents' house, then pleads with her to pose as his girlfriend. Billy tries to convince his parents that he is on the verge of becoming a successful writer, but is roped into helping run his father's furniture store because of a deal the two once made. He quits in a huff after his father questions his sales techniques, and later asks his dad to let him live his own life. Sandy gets a swelled head after landing a part in a horror movie, and ends up moving out. She comes down to earth after the director tries to insert nudity into one of her scenes. Michael injures himself at the apartment. He and Jane discuss their excitement and anxiety about the upcoming birth of their baby.

While Sandy is hat-shopping with Rhonda, a cute guy named Paul sees her through the store window. He quickly asks her out, and she accepts. However, she soon realizes that there is no spark between them and tries to let him down gently. Paul can't seem to take the hint, and keeps showing up and trying to win her heart. Sandy becomes very uncomfortable, but her friends feel that Paul is a nice guy who deserves a chance. However, he soon begins calling her in the middle of the night. Jake promises to protect Sandy, and they discuss their dysfunctional relationship as they spend time together. Paul breaks into Sandy's apartment and covers her bedroom with flowers. Jake tracks him down and roughs him up, and winds up behind bars. Sandy angrily confronts Paul and convinces him to drop the charges and leave her alone. Meanwhile, Alison looks to replace her clunker car, ""Betsy."" However, she has a hard time letting go of her first car because of all the memories it holds.

Billy helps a woman whose car has broken down along the side of her road. He gives her a ride to a gas station. When she doesn't have the money to pay him, she gives him some passes to a club where she is performing stand-up comedy for an Open Mic night. They get along very well, but Billy soon learns that she has an eight-year-old son. The boy initially rejects Billy, but they soon begin to bond. Billy loses Alison's trust by lying to her so that she will loan him the money Dawn needs for car repairs to make it to her first professional stand-up gig. The relationship falls apart when Billy gets into a confrontation with Dawn's useless ex-husband. Jake and Sandy try to rebuild their relationship, agreeing to go on a ""platonic"" date. Things quickly get out of hand, leaving Sandy enraged and the two not on speaking terms.

During his surprise birthday party, Jake receives an unexpected visit from his mother. Her constant drinking and carousing creates friction in their already-strained relationship. Although Sandy suggests that he be more understanding, Jake throws his mother out. He is too hurt by her mistakes of the past to have her in his present life. He later goes to see her off and wish her well. Billy is the victim of a car-jacking after dropping off a passenger in South Central, and begins to display signs of racial prejudice. Rhonda is furious. She talks with Matt and says that her reaction is partially the result of disappointment in herself; she has become so intent on living her life color blind that she has turned her back on her culture. Billy and Jake conduct a stake-out that leads to the arrest of the culprit. Rhonda takes Billy back to South Central to educate him about the area's people. Jane and Michael quarrel after he behaves insensitively during a parenting class. She believes

During a routine appointment, Jane learns that her baby has died. Michael is reluctant to express his emotions about the loss, and quarrels with colleague Kimberly Shaw when she tries to convince him to show his feelings. He later apologizes, and the two flirt rather obviously. The Mancinis' friends give them a dog to help take their mind off of losing the baby, but Jane loses the dog at the beach. Michael lashes out at her and admits that he fears she may have lost the baby because she initially considered an abortion. He later apologizes for not being more supportive throughout the pregnancy. They find the dog, but let a lonely old woman keep it. Meanwhile, Alison is enraged after finding Billy fooling around with one of her bras while doing the laundry. She claims their friendship is over, but later explains the reason for her anger.

After a chance meeting in the street, Alison becomes romantically involved with environmentalist Keith Gray. She is stunned to learn that he is married, but finds it difficult to break off the relationship after he vows to leave his wife for her. Billy is saddled with bad credit because he has yet to pay off a college loan that he didn't even need. Jane is determined to work off the weight from her pregnancy. She realizes that she is trying too hard to forget the miscarriage.

Alison continues to see Keith, despite the misgivings of her friends and the fact that her erratic behavior has put her job in jeopardy. Billy confronts Keith about his treatment of Alison. Matt is the victim of an attack outside a nightclub. When an officer from the hate crimes unit comes to the halfway house, Matt's supervisor is stunned to learn that Matt is gay. He quickly devises a reason to fire him. Jake and Rhonda convince Matt to seek legal recourse. A customer at Shooters asks Sandy to audition for a soap opera. She wins the role and moves to New York.