Paul, Lauren's boyfriend from the previous school year, arrives back in the city and the sparks begin to fly once again between the two. This inspires a fit of jealousy in Jackson and he starts spying on the couple. Also, Winnie meets Prince Nicholas of ""Lichtenberg,"" who is enamored with her and asks her on a date. But before she goes, Ashley, Mr. Elliot and Ms. Dupre give Winnie lessons on the proper way to act around royalty.

Mr. Elliot is making Ashley's love life difficult by scaring off all potential dates, until Chad comes along and she finally gets to go out. But then she finds out her father the headmaster paid Chad (or Bernie, his real name) to take her out. To get back at him, Ashley pretends to be going out with Lazzarini, which drives Mr. Elliot crazy. Also, Christian blew $400 that was supposed to go toward a ski trip on ski clothes for himself. To replace the funds, he and Jackson enter a contest sponsored by Ms. Dupre in which the winner will cater a faculty dinner. Their competition includes Lauren and Winnie.

The guys can't get any phone time with the girls always on the suite's one line. Rather than pay for another phone, the boys try to wire up their own line. It turns out that they rig up a duplicate line so they can eavesdrop on the girls' private conversations. Jackson uses this inside knowledge to his advantage with Lauren. Also, Winnie and Ashley try to relocate the ""hunky"" pizza delivery guy they saw before and Mr. Elliot and Ms. Dupre work together on a fundraiser.

Lazz is chatting in an online romance with a girl named Melanie. She sends her picture and Lazz is shocked to see that she's gorgeous. Nervous about her beauty, he sends her a picture of Jackson. When Melanie makes a surprise visit, it sparks confusion so the gang helps Lazz impress her. Melanie falls in love with Lazz who is still pretending to be Jackson. Lazz tells Melanie the truth. She is furious with him for lying and storms off. Lazz writes her an apology but is too nervous to send it, so Jackson sends it for him. Melanie reads it and is so touched that she forgives Lazz, but she has some sad news--she's due to fly back to Colorado. Lazz and Melanie agree to keep in contact over the internet. Meanwhile, Ashley developes her mother's snoring problems.

Christian is in danger of failing Ms. Dupre's history class. He must get at least a ""B"" on the next test or he will kicked off the basketball team. The guys convince Winnie to tutor Christian and to her great surprise, she finds that she's attracted to him. Also, Lazz does such a good job of cutting Ashley's hair that he and Jackson start their own hair-styling business. But business starts to go sour after they accidentally turn Lauren's hair green!

Jackson's father, a successful businessman, comes to visit at the school and he's not happy when his son tells him he plans to pursue a musical career. Dad threatens to pull Jackson out of the Academy if he doesn't give up the idea. The other roommates hold a yard sale. They sell an old painting to the school librarian Mr. Macafee, then find out it might be a valuable family heirloom of Mr. Elliot's.

In Ms. Dupre's drama class, Jackson and Ashley have to kiss for a scene. While practicing the exercise, they find they really enjoy it! But the two soon realize that even though they have a great physical attraction for each other, they may not be right for a more serious relationship. Meanwhile, Christian doesn't want to go to the dentist for his painful toothache, and after he's sent to ""Dr. Giggles,"" it looks like his apprehension may have been justified.