Pacey gets a job at a bar and meets an attractive Hispanic waitress named Karen. Although Karen has a very non-friendly boyfriend, that doesn't stop Pacey from feeling attracted to her. Dawson arrives to visit Joey, and is misled by Audrey when she decides to set her sights on him herself. Jen's compassion gets her to help Charlie and be on the college radio station.

Dawson is hit with tragedy after he heads home to Capeside to break the news to his parents that he is dropping out of USC to be with Joey, who is in shock herself after she realizes Pacey has been in Boston for weeks.

Dawson takes Joey up on her invitation for a weekend in Boston, but the two have reservations once there. Meanwhile, Jack is surprised when his boyfriend Tobey shows up unexpectedly forcing Jack to choose between fraternity hell week and spending time with Tobey.

Dawson is having trouble with anxiety attacks since his father's death, so he tries to escape reality on a night of debauchery with Jack and his fraternity brothers, which ends with Dawson's accusing Joey of causing his father's death.

Meanwhile, Jen seeks revenge on Charlie; Audrey's mom visits; and Pacey makes a discovery about Danny.

Jen helps Dawson go to the shrink he ran away from last week. Dawson still thinks that the whole idea of sharing his thoughts with a complete stranger is weird, but he is surprised with how much he learns from it. Back home, he has to handle the problem with his father will, which does not include Lily. Meanwhile, Joey is working on a project about old love letters written by an obscure writer, and with the help of Audrey's audition tape for ""The Real World: Ibiza"", she manages to catch something no one of the fellow students caught. Pacey confronts Karen about the risks she is taking for having an affair with Danny, and Karen is hurt when Danny's wife shows up at a dinner party and he blows her off completely.

Dawson takes Jen on a road trip to a small film festival in New Hampshire where his documentary is being honored. The spotlight is intoxicating for both of them as they share one of the single most momentous events in a boy's life.

Meanwhile, Jack brings Joey and Audrey to a frat party under false pretenses; and Pacey takes Karen on a non-romantic date.

Joey and Audrey go to a nightclub to celebrate both Joey's grades and fall break. There, Audrey tries to convince Joey to have some real fun. Charlie is also there and he hits on Joey, who turns him down for what he did to Jen. But Charlie doesn't give up so easily and dares Joey to do something wild. She accepts the dare and goes on the stage to sing with the band. Excited about it, she kisses Charlie. Meanwhile, Pacey sees himself hanging out with Audrey after he joins the ladies at the club to celebrate his new promotion. And Dawson and Jen go back to Capeside, where they have their first fight over what Dawson will do with his life. At the end he decides to move in to Grams's attic in Boston and move on with his life.

Dawson and Jen realize that living together is not as much fun as they hoped to be. Between ruined toothbrushes and bathroom overcrowding, they're getting on each other's nerves. Jen faces a new challenge at work after she turns her regular show into an advice show. She mainly gives advice to other girls with problems, and makes statements on men that hurt Dawson's feelings. She comes home expecting a fight, but Dawson surprises her saying he won't fight or lie or cheat on her. Meanwhile, Melanie (Pacey's summer flame) shows up offering Pacey a job working with her uncle's new boat around the Greek Islands. After a lot of thinking, Pacey decides not to go, since he has developed a successful life in Boston working at the Civilization. Jack moves into the fraternity house and gets his own room, but has some problems staying there after he discovers he was supposed to be rooming with another guy who felt uncomfortable living with a gay guy. And Joey decides to give Elliott Sawyer another

As summer approaches, everyone gets ready for various travels. Dawson prepares to head out for LA with Audrey, while Jack and Jen get ready for their Costa Rica vacation. Left behind in Capeside for the summer, Joey and Pacey lament their fates - until they make a crucial last-minute decision that changes everything.