Peter hires an efficiency expert named Caitlin Mills, who proves to be a headache for Amanda. Alison neglects Billy as her romance with Terry blossoms. Michael, prompted to investigate by Amanda, learns that Peter has been padding his income through a phony research project. Billy discovers that Peter and Caitlin are romantically involved. Jo hires an Englishwoman named Emily Baldwin as her son's nanny. Jo names her son Austin, and plans to move back to New York. Emily offers Jo a ride to the airport, then drives off with the baby.

Jake and Jo see the Carters arrive at the cabin with Emily and the baby. While Jake is calling the police, Jo disobeys his wishes and confronts the Carters. Mr. Carter shoots her in the back. Mrs. Carter sneaks into Jo's hospital room in the middle of the night, and threatens to kill Austin if she does not receive custody. The judge nullifies the previous custody arrangement, and agrees with Jo's suggestion that the baby be given up for adoption. Amanda is fired after testing positive for illegal drug use. Amanda and Matt discover that Peter prescribed pills for Amanda that contained the active ingredient in marijuana. Although Amanda has no proof, Peter believes her bluff. He knocks her out and plans to kill her on the operating table. Michael pulls the scalpel away and breaks Peter's nose. Michael and Amanda interrupt a D&D meeting where Caitlin is to be appointed president, and discredit her. Alison stops Terry from drinking after he loses a playoff game. He expresses his gratitude

Rikki commits acts of vandalism against Jo, Jane and Jake, who believe that Syd is responsible for the crimes. The isolated Sydney is forced to turn to Martin's cult for comfort. The visiting Meredith admits that she has never slept with a man because of the trauma of the childhood abuse. She tries to seduce Billy. The new chief-of-staff institutes mandatory psychological testing for the staff. Kimberly's test proves that she is extremely disturbed and highly dangerous. She has some men on the street assault test coordinator Matt, then changes her results while he is out of commission. John Rawlings, the police detective investigating the case, befriends Matt. Billy is concerned by Amanda's deteriorating health, and asks Michael to check her out. Amanda is horrified when tests reveal that she has Hodgkin's Disease.