Dawson returns from spending the summer in Philadelphia with his mother, and on his way home meets a beautiful young woman who brings trouble to his otherwise ho-hum life. Meanwhile, Joey, who has frozen Dawson out all summer, realizes she is still reeling from their unexpected break-up when she sees him again, but may have found an unexpected new friend for their junior year; Jen gets more than she bargained for when she takes on the fascist head cheerleader; Mitch accepts a new position as Capeside High's varsity football coach; and although Pacey tries to be brave, he has had a lonely summer without Andie.

Dawson is recruited by his dad and Principal Green to produce a film for the football pep rally, but the stars of the film end up being Dawson and his lady friend Eve, not the Capeside Minutemen. Meanwhile, Pacey has enlisted Joey for assistance in bringing Andie back to Capeside, but their long-awaited reunion doesn't go exactly as Pacey had intended; and Jack comes to an unexpected understanding with his father who has returned to Capeside to be with Jack and Andie.

Dawson is stunned when Eve presents him with a sneak peak at the PSAT test and everyone is tempted to cheat including Joey, whose scholarship is dependent on her SAT scores, and Andie, who is desperately fighting for acceptance to Harvard. But when the test is stolen, it's Pacey that Dawson accuses since he sees Pacey slipping back to his old ways. Meanwhile, Jack is insistent that the football team is purposely beating him down because he is gay.

Father and son are at odds when Dawson moves forward with a news piece for his mom's Philadelphia station using Mitch's star player, Jack, as his subject matter even though Mitch is vehemently opposed. Meanwhile, Joey and Pacey find themselves in cahoots when they must pay the price for ditching class; Andie jumps to conclusions and panics about the reasons Principal Green wants to meet with her; and Jen goes to great lengths to remove herself as head cheerleader but is shocked at the end results.

In a bone-chilling installment, Dawson recruits Joey, Pacey and Jen to be his guerrilla crew on a documentary for history class about Witch Island, a local spot shrouded in mystery for its reputation for being haunted by witches. They are haunted by tall tales of witches and love lost that has Dawson and Joey questioning their own romance and Jen and Pacey considering a new kind of friendship. Back at school, Andie takes her job on the school disciplinary committee a little too seriously when she tries taking back the halls of Capeside.

Dawson experiences an identity crisis when Principal Green's daughter Nikki emerges as another aspiring young director, and Joey experiences her own crisis when Dawson won't open up to her about the pain of his parents' divorce. Meanwhile, Jack's first efforts to hit on another guy are rebuffed, Pacey and Andie uncomfortably find themselves sharing the same after school activity, and Jen realizes that she may have passed up the chance at something special with Henry.

Joey is chosen to be part of a group of students to paint a school mural, but when hers is defaced before the unveiling, Dawson offers words of encouragement while Pacey takes action and risks suspension when he goes in search of the culprit. Meanwhile, when Andie's PSAT scores rank among the best in the country, she gambles with everything she has worked for and comes clean to Principal Green about the previously stolen test; and Pacey moves in with Deputy Doug when their sister and her kids move back into the Witter house.

Joey relies on the support of Pacey and A.J. to rally the students in protest against the school superintendent after he forces Principal Green to resign for expelling the student who destroyed Joey's mural. Meanwhile, Dawson and Gail both go back to their respective places in back and in front of the camera to produce a piece about the ongoing school protest which ruffles more than a few feathers of the school board hierarchy.