Speaking at her own prearranged press conference, Alexis brashly announces a masquerade party fund-raiser at the Carrington mansion. Upon returning from Hong Kong, Blake reluctantly agrees to host the event in hopes of persuading ex-senator Buck Fallmont to reevaluate his stand on the pipeline. Intercepting a call meant for Caress, Alexis learns of her sister's spiteful plan to write a book on her tumultuous life. Garrett confronts Dominique with the fact that Jackie's father is listed as ""unknown"" on her birth certificate. Dominique denies Garrett's assertions that Jackie may be his daughter. At the masquerade ball, Bart Fallmont shows Steven the newspaper headline running in the next morning's edition, which claims that Bart had a homosexual lover. Steven immediately suspects Adam's treachery and a fight ensues. Alexis then sets her plan for Blake's demise into motion when Ben removes his costume and reveals himself as Blake's brother.

Blake's hopes are renewed when a key witness, Franklin, admits that Alexis paid him to alter his testimony. But Franklin later arrives in court intoxicated and is unable to answer any questions. Angered by the drunken witness, the judge rules in favor of Ben, and Blake is forced to surrender one-fourth of the family estate. Blake vows to appeal and is determined to track down the mysterious woman who can clear his name. Bart is dropped from the senatorial race when newspaper headlines announce his homosexuality. Bart is relieved, but Steven is outraged and argues with a remorseless Adam. Bart's father, Buck, turns to Blake for advice. Dex offers Clay Fallmont a job on the pipeline. As Blake and Dex review construction particulars, a rancorous ex-employee orchestrates a potentially fatal accident. Buck Fallmont's wife, Emily, is ready to confess that she and Ben met the night of Ellen Carrington's tragic death. Fearing discovery, Ben warns Emily of the scandal that would result if she d

Determined to find the identity of the mystery woman Ben was in bed with the night of his mother's death, Caress begins to solve the mystery. When she witnesses a secret rendezvous between Emily and Ben, her suspicions are proven. In a desperate attempt to raise the money for the leveraged buy-out of Colby Co, Blake temporarily relinquishes control of Krystle Holdings to Bob Ashrnore in exchange for a 100 million dollar loan. The demise of Blake's empire continues when Bob Ashrnore places a congratulatory call to Ben, celebrating their successful coup over the unsuspecting Blake. As Ben's plot to ruin his brother unfolds, Alexis prepares to present the Chinese government with falsified records showing Blake to be cheating them of royalties from the China Sea leases. Claudia threatens to reveal Adam's power of attorney over Denver-Carrington unless the title to the oil well stolen from her is returned.

With his reputation destroyed after the court battle with Ben, Jim Ellison, the influential Eastern money broker, refuses to loan Blake the one billion dollars needed to rebuild Denver-Carrington. Unexpectedly, Middle Eastern financial magnate Farouk Ahrned offers to loan Blake the money for a staggering fee. Desperate for the capital, Blake accepts, not knowing that Alexis is his actual creditor. Through furtive investigations, Caress discovers that Emily Fallmont was with Ben the night of Ellen Carrington's death. She quickly relates this information to Blake, and leaves with him her expose, ""Sister Dearest"" as additional ammunition against Alexis. Blake confronts Emily, who breaks down and confesses her guilt. Seeing her torment, Blake promises to fight Ben without benefit of Emily's testimony. Struggling on her own, Jackie reconsiders her rash action of running away. Returning home, Jackie is shocked to learn that Garrett is her real father. Amanda becomes more and more despondent

Blake discovers La Mirage manager Jay Bradley purposely failed to tell him he hired the man believed responsible for the fire. Alexis continues her ruthless campaign against Blake, offering a $100,000 dollar reward for information leading to the arrest and conviction of the arsonist. Michael Culhane, bent to avenge the humiliation caused him by Blake in the past, intensifies his efforts to charm Amanda. Blake and Dex agree to work together on an ambitious new drilling venture; a gamble that could win him back his empire or lose everything he ever had. Desperate to know more about their secret deal, Alexis acquires the talents of Gordon Wales, an investigative reporter with a dislike for Blake. Ben and Adam continue to distrust each other, as they are asked to prove their loyalty to Alexis. Ben bribes Jay Bradley, bitter after losing his job, to conspire against Blake. A moment of joy shared with Krystle is crushed by a warrant for Blake's arrest for murder and arson.

Alexis learns of Ben's ploy to frame Blake with a bogus witness. Blake is denied bail and forced to await his trial behind bars. Krystle consults a doctor regarding her dizzy spells and ignores his advice to slow down and rest. Adam overhears Ben nervously reject a call from Australia, arousing his suspicions behind Ben's evasiveness. Jackie is able to tell Krystle and Dominique that the La Mirage blaze started in Claudia's room, proving Blake did not hire an arsonist. The information forces the Assistant D.A. to drop all charges against Blake. Fearing Buck's strong contempt for the Carringtons, Clay unsuccessfully tries to persuade Sammy Jo against accepting his mother's invitation to dinner. Blake receives a letter from Caress in a Caracas prison pleading for his help. He decides to attempt her freedom in exchange for her testimony against Ben. As a raging storm strands Alexis alone with Dex in his construction trailer, the two rekindle their romance by making passionate love.

Caress vows to avenge her years of imprisonment by threatening to reveal Alexis and Ben's conspiracy behind Blake's trial. Dana bitterly attacks Adam for using her to discover Blake's secret venture, ""The Crater"" project. An apparent reconciliation between Alexis and Caress results in a job at the Denver Mirror for Caress, and the beginning of her schemes for retribution. Michael Culhane uses Zach Powers, surreptitiously in his behalf, to offer Blake the $50 million dollar loan he desperately needs. The transaction nets Culhane thirty percent of ""The Crater"" project and the perfect opportunity to crush Blake. Clay is less than ecstatic to learn Sammy Jo is pregnant. Caress promises to illuminate Emily Fallmont's past with Ben unless she's paid $100,000. A devastated Emily turns to Ben for advice. As Caress enters her car, shots ring out, shattering her window, narrowly missing her and thwarting her attempted murder. Michael seduces Amanda. Against Blake's adamant objections, Amanda mov

Caress continues her relentless extortion of Emily Fallmont, who turns to Blake, her only hope. Sammy Jo is hurt by Clay's suggestion of an abortion. Danny's nursery school teacher, Claire Prentice, shows Steven some of Danny's drawings--drawings that reveal a deeply troubled little boy. Clay shows up at Sammy Jo's door and proposes a Las Vegas wedding. Alexis uses the information she requested on Michael Culhane to expose his charade to Amanda. He pleads with Amanda to believe his love for her is real, confessing he loaned the money to her father and promising to never use it against him--as long as she keeps the information secret. Suffering from the pressure of Caress' blackmailing schemes, Emily goes to Buck with the truth that she was with Ben the night of Blake's mother's death. Fleeing from Buck's drunken, verbal abuse, Emily runs blindly in front of a speeding taxi, throwing her apparently lifeless body to the pavement.