The class as well as Deloraine are in shock with the return of Sam Robinson but Rivers might be the last to know

Another face from the past Katerina is back in Australia and moves straight toward Rivers

Jodie's infatuation with singer/songerwriter Tim Beckett is shaken when the self-confessed alcoholic starts drinking again. Katerina convinces Deloraine to let her sell healthier food to the students but her upstart effort is challenged by competition from Con's hot dog stand. Andrew confronts Sam about her past affair with Peter and confesses his own jealousy. Allie feels like she's being shut out by her friends because of her involvement with Matt.

Tim gets Jodie a record deal but Con is left on the outside looking in when the company assigns her a new manager. Katerina pushes herself in preparation for her audition for a national dance company. Steve gets an opportunity to work at a local newspaper but his first assignment goes badly forcing his editor to use his damning pictures of Tim as part of a story on the fallen singer. As his friends fill out their university forms, Matt contemplates what he wants to do with his life. Rivers tries using Katerina to make Sam jealous.

Matt's comfortable existence at Hartley High is threatened when his past comes back to haunt him. Paul - Matt's competitive, over-achieving father - wants his son to return home to his family and a more settled existence. Paul is convinced that Deloraine has let Matthew run wild - a belief that is confirmed when he sees Matt's less than impressive school results. Paul's worst fears about his son become reality when - angered by his father's domineering approach - Matt uncharacteristically lashes out on the basketball court, punching teacher, Andrew. It looks like Steve is also in trouble. Everyone needs him: Con needs photographs for the school magazine, Allie needs help with finding a new flatmate, and Danielle wants to go to the movies with him. But Steve is missing. Everyone is angry and puzzled: it's just not like Steve to go disappear without a word. Where is he? The answer will change Hartley High and its students forever.

When Steve's death is investigated for a Coronial Report, the question arises of how well his sister, Allie, and friends actually knew him. Allie is convinced his death was an accident - a terrible tragedy - but Danielle is not so sure. Their different points of view inevitably lead to conflict especially when Allie allows Matt to move into Steve's old room. They're not the only ones having difficulty coming to terms with Steve's death. Con just can't face putting together the school paper which is to be a tribute to Steve. But that's because he has a secret. It is only the intervention of new teacher, Ronnie Brooks, that helps bring the gang together again, and resolve their feelings of grief over Steve's death.

Danielle is disgusted when she and Declan stumble upon Matt and Stassy secretly kissing in the school gym. She wrestles with her conscience - she should tell her best friend Allie but is stopped by Declan who thinks they should mind their own business. Stassy has come to the bitter realisation that her moment with Matt was simply a diversion for him and that he is still in love with Allie. She is even more humiliated when she is asked to interpret Shakespeare's ""Much Ado About Nothing"" which reflects with bitter irony her own life. With pressure coming from all angles Stassy is bound to crack, but where will that leave Matt & Allie? When June Dyson's son Gary makes an unexpected visit he and Bolton forge an unlikely friendship. However, Bolton finds himself in the middle of a family feud and it seems that he could be the one to fix it.

Mr. Summers announces a new Creative Marketing Project which sees the kids pair up to create and market environmentally friendly products from their original ideas. While Matt and Bolton push their ""Bolton's Beads"", Danielle markets Declan's repackaged musical talents, while Katerina's perfume endeavour fizzles. Meanwhile, Stassy and Allie's project is threatened by Stassy's father's steadfast refusal to allow his daughter to work after school or go to the final presentations at the Shark Pool. Stassy goes behind her father's back to attend the presentations but when he finds out (her picture was in the newspaper), their heated argument culminates in Stassy leaving home.

With his parents making plans to divorce, Charlie falls into the clutches of a cult, the ""Deliverance Movement"". Katerina asks Stassy for her help (she was very briefly involved with them) to get Charlie out, and along with Matt, Bolton, and Declan, they rescue Charlie from the cult's commune. Helen is irked by Roberto's laissez-faire attitude towards their impending 20th anniversary and petty jealousies about one another's coworkers only add to the Bordino's domestic dilemmas. Feeling squeezed out by Matt's arrival at the warehouse, Danielle asks Declan about the possibility of moving in with him and his mother. Declan turns her down stating that his mother would feel embarrassed but Danielle quickly realises that Declan is not telling her the truth.

With HSC exams just a few short days away, Bolton rallies his classmates to make their Muck-Up Day an event to remember. Events however go horribly wrong when a fire breaks out in the school computer lab and Dyson eyes Matt as her prime suspect — and threatens to withdraw the entire class's HSC eligibility unless the culprit comes forward. Fortunately, while reviewing the video Charlie made of the days events, Katerina spots the real perpetrator (he's an old friend of Matt's who was kicked out of school and returned to settle the score) and Matt is exonerated. Charlie proposes to Katerina, but after her acceptance, they both begin to have second thoughts about the commitment and decide to put off their nuptials — much to Roberto's delight. The gang decide to create a time capsule to mark the year's end, and after burying it, Danielle announces to her friends that she's decided to take a reporter's job offered to her by a television station in Wollongong.

Anita and Drazic are back together but Hilary is adamant the relationship can't happen! When Anita threatens to leave home Hilary decides to confront Drazic, reminding him that their relationship violates his probation. Will Hilary's actions drive a wedge between her and Anita or is a compromise to be found? In the aftermath of the break-up Charlie announces that he is moving out of the Scheppers. He seems to be emotionally stable, but Melanie becomes suspicious of his state of mind when he turns up to school tired and unkempt and generally acting strangely. Mai, estranged from her family, is stunned when her father, who lives in Hong Kong, turns up unannounced. Katerina convinces her that family is important and Mai agrees to meet with him. Will she be disappointed once again?

Anita has had it with Drazic. She has long known that he can be a boorish yobbo, but when he insults a blind guest teacher, she has finally had enough. Anita makes it clear that she will have nothing more to with Drazic until he learns to be more sympathetic and empathetic with the people he so happily persecutes in everyday life. Drazic is in quandary — how can he show Anita that he is suddenly a more sensitive and caring guy? The answer is in a pair of blacked-out sunglasses. Drazic decides to ""blind"" for a day. He thinks it will be easy, but he is in for a shock. Over at the Black household, Melanie and Charlie are about to become more than just good friends and flatmates. After a night on the town celebrating their success in a science test, Hartley High's two biggest nerds find nirvana in one another's arms. In the course of a photographic assignment for art class, Katerina happens to get some candid snaps of Ryan in his swimming costume. At first it looks like she has scored the