Jo is certain that Amanda will not gracefully bow out of her relationship with Jake. Hillary refuses to believe that Chas tried to seduce Amanda. Chas files a $10 million sexual harassment suit against Amanda, and the agency does not support her. She turns to Jake for consolation. Sydney is assaulted by three hookers when she invades their turf. Kimberly comforts her and pays her rent. She convinces Syd to participate in her plot to kill Michael, and they plan the crime over ice cream. Michael stands in the way of Jane's plans to expand her business. Billy's college friend Rob comes to town to serve as his best man, and gets along well with Matt. Billy is stunned to see them kissing in the courtyard.

Kimberly brings Michael home from the hospital. Sydney convinces Matt to visit her in prison, and tells him that Kimberly is setting her up. Sydney's father flies in from Chicago, but enrages his daughter by suggesting she seek a plea bargain. Matt becomes suspicious of Kimberly when he realizes that she is shielding Michael from the truth about their history. Sydney's outburst convinces Mr. Andrews that she is crazy, and he and Jane have her committed to a mental hospital. Alison and Meredith fly to Wisconsin and attempt to file charges against their father, but Meredith bails out when she realizes that the town respects Mr. Parker too much to give their story credence. Alison confronts her father in front of all the prominent townspeople at a barbecue, and pushes him into admitting his guilt. Billy is fired when Nancy learns that he helped D&D get the inside track on the Escapade account, but lands a job writing ad copy for D&D. Jake sleeps with Brittany, unaware that Palmer Woodward

Chris warns that his company will have to cancel his deal with Jane's firm if Michael does not sign off on it. Sydney calls Matt from the mental hospital and pleads with him to investigate Kimberly. Jane and Matt visit the beach house, where she bonds with Michael while Matt snoops. He discovers that Kimberly owns several wigs, then rips off her wig during a confrontation at the hospital. Sydney accepts a plea bargain after a scummy staff member propositions her, and is released into Jane's custody. Kimberly vows revenge against Matt. Palmer and Brittany continue their plot against Jake. Palmer turns up on Amanda's doorstep. Billy and Alison break up after she learns that he took a job at D&D without consulting her. Jo receives a surprise visit from Reed's parents. She reluctantly admits that Reed is the father of her child, and is shocked when the Carters sue her for custody.

Sydney (claiming to be someone named Miranda) hangs around the beach house and attempts to seduce Michael. Michael regains his memory when he is nearly struck by a car in a restaurant parking lot, but doesn't immediately reveal this. Michael leaves Sydney in an embarrassing situation in Jane's bedroom, prompting a suggestive remark from Chris. Michael confronts Kimberly and dares her to kill him, but she decides that she loves him too much to finish him off. Billy and Alison bicker constantly at the office. Jo extends an olive branch to the Carters, only to have them laugh in her face. Palmer tells Amanda that he cannot go to prison before paying off some debts, as he fears his creditors will harm her. He tells her of a secret safe deposit box and convinces her to withdraw $500,000. Palmer kidnaps Jake on the boat at gunpoint, and explains that he and Brittany are going to take the money and flee to Mexico. Brittany double-crosses Palmer, shooting him in the back. Jake discovers that t

Jake's friends (especially Jo and Amanda) are shocked to learn that the Pretty Lady has exploded. The Coast Guard finds Jake clinging for life to a buoy, and he returns to the building safely. Jo is hurt when Jake completely ignores her to visit Amanda, unaware that he is breaking the news of Palmer's death. When Jo shares her feelings with Jake, they get into a heated argument. He turns his apartment keys over to Matt and takes off on his motorcycle. Alison is disgusted when Billy begins dating their new secretary. Jane and Chris ask Sydney to seek Michael's share of the design firm in the divorce settlement, but Michael tricks her into settling for $5000.

Jo and Amanda argue over who is to blame for Jake's departure. Jake meets his biological father, Vince Connors. After they resolve some of their differences, Vince convinces Jake to return to Melrose. Jake apologizes for abandoning Jo, then learns from the FBI that he is to receive a large reward for assisting with the capture of Brittany. Chris continually makes unwanted advances toward Sydney, but Jane believes her sister is just trying to cause trouble. Alison gets her new secretary fired, and picks up a guy at Shooters. She seeks revenge after he leads her to believe he wants a relationship, when he was actually just looking for a one-night stand. Peter Burns, the hospital's new chief of staff, lays down the law to Michael and Kimberly.

Jake uses his reward money to purchase Shooters. When Jake drops off some papers at the design firm, Chris mistakes him for a deliveryman and makes a lewd comment about Sydney. Chris denies the allegations. Jane lashes out at Jake, and fires and evicts Sydney. Jake gives Syd a job at Shooters so that she won't have to return to the mental hospital. Chris tries to attack Sydney. Michael and Kimberly are asked to appear in a coffee ad. Peter agrees to allow this in order to impress Amanda. She goes out to dinner with him. Billy takes a liking to Alison's college roommate, Susan. Susan moves in with Alison when a chef job in Santa Barbara falls through.

Jake provides Sydney with refuge after learning of the attack. Amanda reveals that Jane and Chris have gone to Las Vegas, and Sydney realizes that Chris is planning to make good on his promise to marry Jane. Michael fears that Chris is after Jane's money. He follows them to Las Vegas, with Kimberly in pursuit. Chris wins big in the casino and proposes to Jane. Michael and Kimberly break up the wedding, then tie the knot themselves. Michael is fired for skipping work. Jo is hospitalized with an ulcer, and Kimberly provides comfort. Jake beats up Chris and sleeps with Sydney. Peter continues to pursue Amanda. Alison learns about Billy's involvement with Susan.

Sydney plans to leave town to avoid her problems with Chris, but Jake convinces her to stay and give their relationship a chance. Alison claims to have accepted Billy's relationship with Susan, but begins hitting the bottle. She gets into a catfight with Susan at a client party, prompting Susan to move in with Billy. Michael asks Amanda to manipulate Peter into rehiring him. Amanda agrees, provided that Michael surrender his share in the design firm. Jane promises to give Amanda 25 percent of the business if she can arrange this. Once Michael has returned to work, he backs out of the deal and tries to blackmail Amanda. Peter encourages Amanda to seek control of D&D. Matt learns that Jeffrey, an ex-lover, is back in town. He is stunned when Jeffrey reveals that he has left the Navy and is HIV positive. Jo prepares for the custody trial.

The trial to determine custody of Jo's baby begins. The Carters' attorney raises many doubts about the character of Jo's friends and neighbors, but Jo shines on the stand. Kimberly learns that she cannot have children because of injuries suffered in the car accident. Alison gets drunk at a client party and leaves with a hard-living music business scout named Zack Phillips. Bruce suffers a heart attack while dancing at the event, and Peter suggests that Amanda use the opportunity to seize control of the agency. Alison is unable to testify on Jo's behalf because she is stoned following a night of partying with Zack. The judge awards custody of the baby to the Carters. Matt questions his relationship with Jeffrey due to the illness, but the two decide to commit to each other.

Zack encourages Alison to buy an expensive new car and skip work. Billy and Susan confront Alison during Thanksgiving dinner, but she reacts angrily and storms out. A drunken Alison tries to drive to Zack's house, but he is having a party with his friends. While distracted by her phone, she crashes into a boy on a bicycle. Kimberly explores several motherhood options, some of them illegal. She invites Jo over for Thanksgiving and convinces her to fake a miscarriage and hide her baby from the Carters. A mobster's associates begin harassing Jake. Sydney is told that Jake will suffer a serious accident unless she sleeps with the mobster's friend--Chris. Amanda leaks information about Bruce's health, while Peter prepares a takeover attempt. Matt and Jeffrey refuse to come to Thanksgiving dinner after Matt's parents ask them to hide the true nature of their relationship.

Alison is arrested for driving under the influence. She turns to Billy for comfort when Zack neglects her, but Billy reaffirms his relationship with Susan. Alison is cleared of all charges because witnesses felt that the bicyclist had been at fault. Bruce fires Amanda when he realizes that she leaked information and scuttled a possible merger. Kimberly takes Jo to the beach house and induces labor. She checks Jo into the hospital, claiming that she delivered a stillborn child. When Jo shows up at the beach house to take the baby, Kimberly insists that the boy is her child. After Jane allows Chris to deposit a $500,000 check, Chris clears out Jane's account and kidnaps Sydney.

Bruce learns that D&D has been purchased by a consortium of doctors. Peter fires Bruce and appoints Amanda president. Amanda gives Billy a promotion and orders him to fire Alison, who has begun to experience blackouts. Bruce hangs himself in Amanda's office. Matt tells Billy that he can save Alison's job by checking her into rehab. They conduct an intervention, and Alison agrees to seek treatment. She escapes when the trio stops for gas, but later checks herself into the clinic. Sydney decides that she doesn't mind being a hostage when Chris buys her expensive gifts and gives her unlimited use of his credit cards. She finally calls Jake and asks for help after Chris loses all of Jane's money and becomes abusive. Michael, Jane and Jake fly to Las Vegas, where Jake expresses his doubts about Sydney's behavior. Jane and Michael learn that all the money is gone, and sleep together. Michael demands to know why Kimberly suddenly has a child. Jo struggles to prove that her son is alive.