Billy tells Amanda that he and Alison are back together. Amanda responds by removing Alison from the Microcomp account because she was romantically involved with the client. Amanda moves forward with her plans to evict Jake, but Jo refuses to testify against him. Amanda relents when she needs Jake's help with a plumbing problem. Palmer confesses his guilt to Amanda and skips town. She goes back to Jake. Jo goes to her ten-year high school reunion and runs into Reed, an old boyfriend who has just been released from prison. He later turns up at her apartment. Michael has a breakthrough at a physical therapy session, and regains the use of his legs. Sydney is busted for prostitution. Michael bails her out and agrees to keep quiet if she helps him break up Jane and Robert.

Alison complains to the brass about Amanda's mistreatment of her. After the FBI shows up with questions about her father's disappearance, Amanda is ordered to take a vacation. She heads to Hawaii with Jake, but returns because she fears that Alison is after her job. She goes to Billy and threatens to expose their one-night stand unless he gets Alison to back off. He refuses to cave in, although Alison ends up apologizing to Amanda anyway. Sydney sets up a hooker with an unknowing Robert during a business trip. Jane receives a videotape of the two together and breaks up with Robert. Reed and Jo sleep together. He later decides to start a charter boat service.

After Michael shuns her, Sydney tells Jane the truth about her involvement with prostitution and Michael's scheme against Robert. Jane blames herself for Sydney's problems, and throws Michael out. Sydney is acquitted because of an incompetent prosecution team. Jo is angry when Reed approaches Amanda as a potential investor in his charter boat service. Jake confronts Reed about his intentions toward the two women in his life. Billy wins a promotion, but learns that the job requires a move to New York. Matt is annoyed by the bizarre behavior of his new love interest. He learns that the man is a closeted Navy officer.

Amanda and Jo invest in Reed's business, and Jake is hired as chief mechanic. Jo displays a lack of trust toward Reed after he leaves a suitcase of personal possessions in her care. Michael becomes addicted to painkillers. Jane files a restraining order against him. She calls the police when Michael shows up at her apartment, but Sydney gives him refuge. After Michael talks Syd into getting him more pills, she finds him passed out on his bathroom floor. Alison refuses to move to New York with Billy, and suggests they try a long-distance relationship. Jeffrey fears that his relationship with Matt could jeopardize his career.

Jake and Amanda pull out of Reed's business when Jake discovers some inconsistencies in his story, but Jo accuses him of jealousy. Reed picks up a shipment of drugs on the boat while Jo is sleeping on board. When Jo discovers drugs stored in a compartment below deck, Reed assaults and kidnaps her. Sydney overhears a semi-comatose Michael babbling about his plea for Matt to change his blood alcohol results. She lays the groundwork for a blackmail scheme. Frustrated by her inability to get in touch with Billy, Alison flies to New York to surprise him. She is stunned to find him having drinks with another woman. Jeffrey is transferred to the east coast after coming out of the closet.

Reed plans to start over in Mexico after one last major drug deal. Jo knocks him overboard with a harpoon, but the boat runs out of gas. When Reed climbs on board and holds her at gunpoint, Jo is forced to shoot and kill him. She is arrested when the Coast Guard raids the boat. Alison accepts Billy's explanation about his date, but breaks up with him again when he wrongly assumes that she is moving to New York. He follows her back to Los Angeles and surprises her with a marriage proposal. Sydney presents her blackmail demands and moves in with Michael.

Michael attempts to kill Sydney during their honeymoon in the mountains of northern California, but fails twice. Matt pursues them in the hopes of preventing the crime. Michael has the chance to push Syd off a cliff, but cannot go through with it. Sydney vows that he will love her one day. A guilt-ridden Matt tells Jane that he altered Michael's blood alcohol records after the accident. Jane uses a signed confession from Matt to blackmail Michael and Sydney into staying married. Jo is haunted by visions of Reed, and is angry when she learns that Jake has decided to start a charter service on Reed's boat, the Pretty Lady. He convinces Jo to face her guilt head on, and she visits Reed's grave site to offer her forgiveness. Amanda erupts after seeing Jake comfort Jo. Alison decides that she and Billy won't sleep together again until after the wedding.