CAPSULE: Melissa must come to terms with the problems she has over the age difference with Lee. Their relationship is paralleled by a new one between Russell Weller and Peter Montefiore.

Russell drops by Melissa's place and is surprised to find Lee there wearing a towel. Melissa takes Russell to DAA, where he meets Peter Montefiore. Melissa encourages Michael to talk up Peter to Russell; Michael didn't realize before that Peter was gay. Later Lee and Melissa are still in the throes of passion when he has to leave. Lee wonders why she never introduces him to her friends. Melissa tells him that they will go have dinner at the Steadmans soon.

Mel photographs Russell painting. She's nervous about her friends meeting Lee and he's nervous about seeing Peter again. Melissa deliberately passes up a locksmith where she was going to get a key made for Lee. Melissa and Lee arrive at the Steadmans. She imagines all sorts of bad things even though everyone likes her new boyfriend. Peter and Russell

CAPSULE: Amidst a big company layoff, Michael is visited by a mystery man.

It's Halloween time and Ethan is fighting with his mother. He wants to be Freddy Krueger; Nancy says no. At DAA Michael comes into Miles' office and finds him lying on the floor to relieve back pain. In the office is the original 3-D nodel of DAA. Miles tells Michael he's in the office that used to belong to co-founder Duncan Arthur, who died there of a heart attack. He also tells Michael that a 10% reduction in the work force is needed and that it's his job to fire the people. Michael tells Elliot, who refuses to give him any input once he hears that Hollis and Angel are on the list. Working late that evening, Michael hears a squeaking noise. It's the janitor pushing his bucket.

Melissa is at DAA working with Elliot when Miles comes in the office. She's a bit frosty to him. Michael shows Elliot the list of layoffs. Hoillis is on it, but Angel is not. The door to Michael bathroom opens eerily, by itself. Michael

CAPSULE: Everyone gathers at the Steadman house for a New Year celebration.

Gary and Melissa help Hope prepare for the night's New Year's Eve party. Ellyn is worried because she didn't invite Billy; Hope urges her to call him. Guest begin to arrive: Elliot with his kids (Nancy was too tired to come), Angel and Mark from DAA (plus Mark's wife Kate), Peter Montefiore with a woman friend Patsy and her daughter Melody, and Russell Weller. As the festivities start, Hope receives a phone call from her mother, informing her that an old friend from school died. Michael seeks her out, but Hope won't talk about it.

Gary is frustrated that Susannah is snowbound in New York and leaves to ""get some air."" Elliot meanwhile is enjoying himself--and drinking quite a bit. Ethan and Melody, who is a couple of years older, are stuck together watching TV. Russell and Peter run into each other and the meeting is awkward, as neither has called the other after their previous involvement. Ellyn gives in and ca

Michael tries to come to terms with Gary's passing. Among the living, he has problems with Susannah and with Miles and Peter at work.