After losing her baby due to the fall from her horse, Krystle learns she cannot have another child. Steven and Sammy Jo begin dating, but at his cabin, he finds he cannot make love to her. Jeff quits his Uncle Cecil's business and joins Denver-Carrington. Fallon continues her affair with Nick Toscanni. Steven professes his love to Claudia and asks her to marry him. She declines, stating she's still in love with her husband. Fallon interrupts Nick's visit to Krystle in the hospital and angrily assumes the worst, demanding to know if she is ""another page in his appointment book."" Blake's attorney, Andrew Laird, returns from Washington with news of more trouble with the Middle Eastern oil leases.

Blake and Jeff attempt to arrange a meeting with Rashid Ahmed to obtain assistance in releasing their overseas oil tankers. Alexis leaves for Rome to meet Ahmed, a former lover, under the guise of helping Blake. A despondent Krystle refuses Nick's psychiatric treatment. Claudia has recovered sufficiently to maintain her own apartment and take a job with Denver-Carrington. Cecil Colby invites her to dinner to pry company information from her. Fallon, learning she is pregnant, makes plans for an abortion and asks Jeff for a divorce. He agrees, but only after she has their baby. Fallon tells Nick she is in love with him. Alexis calls Blake to Rome, explaining she has arranged a meeting with Ahmed. Her true motive is simply to be alone with her former husband.

Everybody hears about the explosion and it looks like Steven is dead, though Blake goes to look for him. Alexis follows Blake. Sammy Jo's father comes to Krystle to collect Sammy Jo's share of Steven's inheritance, but Krystle throws him out. Joseph comes to Jeff's office and tells him to stay away from Kirby. Jeff is infected by the toxic paint and attacks Joseph. Mark continues to contact Krystle, who tries to get him out of her life. Blake finds out about all the contact between Krystle and Mark and is jealous.