Gary and Val move to their new home in Knots Landing that Miss Ellie Bought for them, and then get acquainted with their new neighbors. Sid's 18-year-old rebellious daughter, Annie from a previous marraige, is visiting the Fairgates and is causing havoc among the family. Val attempts to fix Annie's relationship with her father.

J.R. Ewing is in town planning an offshore drilling project on the beach, which everyone is opposed to, except for Richard who asks Laura to get together with Chip Todson, J.R.'s PR man. He asks her to do this so he can get the account. J.R. has an afternoon rendezvous with Karen (big mistake!). Gary goes to J.R.'s office to steal an important file he can use against his brother. Along with the rest of the community, Gary protests by picketing on the beach.

Richard is opposed to Diana's favorite teacher, David Crane, for his unorthodox teaching methods. He decides to run against him for a seat on the school board. Meanwhile Karen, who is going through mid-life uncertainty, decides to go to the school to find out more about this teacher, but ends up falling for him and even contemplates having an affair with him.

Laura is feeling unappreciated, so she goes to a cocktail lounge in the middle of the afternoon and meets an artist. The artist buys her a drink, then invites her to his studio to do a portrait of her as a ruse to rape her. She hides the truth from Richard by saying a serial rapist that is on the loose in Knots Landing just had raped her at home before Richard got home. Val knows that this is not the case, and as she goes down to the police station to identify her attacker; the police end up arresting the wrong man.

Lilimae Clements, Val's mother, turns up in Knots Landing to visit her daughter. Valene confronts her over being abandoned as a child as Lilimae pursued her music career. As ghosts from the past come back to haunt the mother and daughter, they begin to put the past to rest.

Lucy comes to visit Knots Landing to see her parents, Valene and Gary. Lucy hopes that she will be happier with her parents, but due to past issues and Lucy's lifestyle in Dallas, things do not go quite as planned.

A motorcycle gang causes trouble for the cul-de-sac. Diana gets kidnapped by the group.

Sid's ex-wife, Susan, comes to the cul-de-sac where her motives are questioned by Sid and Karen.

Ginger is terrorized by Mrs. Handleman, her ex-boyfriend's mother. Mrs. Handleman is having a difficult time following the death of her son. It seems that Ginger has aborted a child fathered by her son eight years before and she was angry at Ginger for this.

When Karen learns that she's pregnant, she isn't sure she wants the baby, while Sid can't understand her mixed feelings regarding the pregnancy. When medical complications develop, Karen decides she wants to have the baby, but she miscarries. Eric takes a liking to Ginger's 14-year-old sister who is visiting from Knots Landing. However, when he takes her out on a date, he finds her too sophisticated for him. Ginger tells Kenny she is ready for them to start a family.

When Richard lands in grave financial trouble, Laura wants to get a job to assist with the debt, but Richard won't hear of it. Richard throws a barbecue to try to borrow money from his neighbors to pay off the $20,000 he owes. When Sid finds he is missing a one hundred-dollar bill, Karen thinks it is merely coincidental. When Laura's father, who's visiting from out of town, lends them the money, Richard is relieved. After Karen worries that Diana is spending too much time with her boyfriend, the boyfriend turns out to be the thief of the hundred-dollar bill.

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