Sid picks up a young hitchhiker who sets him up by asking him to give her money. When he refuses, she accuses him of rape. Diana has difficulty facing people. Sid's sister, Abby Cunningham, arrives in Knots Landing with her two children. Karen persuades Sid to find a new attorney instead of Richard.

After Sid fires Richard as the attorney, Richard, in a drunken stupor, causes a scene in the cul-de-sac. Karen is angry when she discovers Richard tried to pay off the hitchhiker to drop the charges. Karen remembers a vital clue which results in getting Sid cleared. Abby decides to move to Knots Landing, and becomes a part of prime-time soap history.

Gary meets Judy Trent who wants his help in getting her husband support from AA. Abby begins to show her manipulative nature (Already?) as she takes advantage of Eric and treis to seduce Kenny. Karen confronts her about this.

Gary makes a car deal with ""Orchid Cab Co."" againest Sid's better judgment. Gary also hires a female mechanic, Linda Stryker. Laura starts her real estate job. After her first sale, her boss, Scooter Warren, kisses her.Val starts college. Richard thinks a prestigious Chicago law firm will hire him, so he tells off his boss and quits his job. Then he finds out the Chicago firm's offer is for a salary several thousands less than he was already making. He cannot accept the job. He tells Laura he declined the job since she didn't want to move, but then starts crying.

Kristen Shepard (she shot J.R., you know) is in Los Angeles following the shooting of J.R. in Dallas. At a party, she is arrested for drug use and decides to call Gary and Valene for help. Valene rushes to the police station to get her released. Kristen manipulates Valene into letting her stay with them. Valene asks Kristen why she left Dallas. Kristen says she has her reasons. Kenny gives Kristen a job at his studio, which upsets Sylvie (are we jealous?). Kenny decided that it is time to end his relationship with Sylvie and concentrate on getting back with Ginger. But alas, Ginger is now going out with Carl Russelman. When Kenny finds this out, he sleeps with Kristen. Ginger comes back early for being with Carl and finds Kenny and Kristen together. Kristen then decided to leave Knots Landing (and good riddance) after Gary sees through her ""sweet"" act. Ginger serves Kenny with a divorce.

The neighbors throw a barbecue for Laura to celebrate her new success as a realtor. At the party, Richard paws Abby and Laura overhears them planning to meet later. Laura later tells Richard she will no longer be his ""whipping boy"", and if his behavior continues, she is going to leave him. Ginger finds out she is pregnant and breaks up with Carl. Val is upset because Gary runs every time Judy Trent needs help with Earl. Val says she needs time with Gary too. Gary continues to comfort Judy and begins an affair with her.

The Fairgates find out that Michael suffers from ADHD (Attention Deficit Hyperactive Disorder). Sid hires Abby as the bookkeeper for Knots Landing Motors. Frank Kolbert and Roy Lance from ""Orchid Cab Co"" offer Gary a deal on cheap parts, but Sid declines, thinking it sounds illegal. Frank and Roy tell Gary they had a verbal agreement and threaten him, telling him he'd better have $50,000.00 for them by the end of the week. Abby overhears and suggests Gary ask J.R. for the money, as she read in the paper that J.R. will be in town soon.

J.R. is in town for an oil convention. When Gary refuses to ask him for the money, Abby goes to J.R. for it and sleeps with him. J.R. says he knows that Abby has designs on Gary and that he'll only give Gary the money if he asks for it himself, so Abby keeps trying to persuade Gary. Val asks Gary not to get in any deals with J.R., and she and J.R. have a nasty confrontation. Roy and Frank continue to pressure Gary, so he finally goes to J.R., who gives him the $50,000.00. Kenny breaks up with Sylvie and wants to get back with Ginger, but she says no.

Linda asks Sid to go away to a race for the weekend. Sid decides not to go, but doesn't pick up on the fact that Linda's interested in him romantically. Gary sells the illegal parts to Sid's supplier so that Sid won't know about it. Laura tries to initiate romance with Richard, but he rejects her. Meanwhile, Abby has started to reject him. Abby and Judy argue over who will 'get' Gary. Judy tells Val that she and Gary are having an affair and love each other. Gary finds Val at the beach. She slaps Gary but they make up. Judy comes to KLMotors the next day. Gary's mad that she told Val, and says he will never leave Val. Judy leaves, and Abby says ""Are you ready for ME now Gary?""

Jeff Cunningham is mad that Abby is having an affair with a married man (Richard) in front of the kids. Sid hears Karen talking with Jeff, and tells her not to discuss Abby with him. Karen says that Sid is blind to Abby, but he defends her and they argue. Jeff files for custody of the kids. He and Abby talk, and he admits he wants her back. Abby sleeps with him so he'll drop the case, and then tells him that it was a one-time thing. Jeff is angry and says she's not playing 'fair' with him. One of Laura's clients kisses her, but she says she can't cheat on Richard. Abby tells Richard that it's over between them.

Richard gets a job with Kippler, Janson and Stern. He apologizes to Laura for how he's been treating her, but secretly is upset that she earns more than he does. Ginger finally tells Kenny that she's pregnant, but that they need to work out their problems before he can move back in. Karen is upset that Linda is in love with Sid, and is scared that they might be having an affair. Sid and Linda take a test drive and the car breaks down on a deserted desert road. Linda tells Sid she loves him. They kiss, but he says he can't have an affair with her. Sid tells Karen he didn't have an affair with Linda, but jokes that if he had he wouldn't tell her, because he hates to 'brag'. Karen is not amused.

Kenny goes to see Ginger at school and implores her to get back together with him. She still refuses. Kenny shows up at her Lamaze class and they argue. Ginger feels bad, and finally tells him that both she and the baby need him. Val's doctor finds a malignant growth in her colon and needs to operate. Gary can't handle it - he feels so guilty about how he's treated Val, and totally breaks down. He calls Miss Ellie weeping, so Bobby comes to support him while Val's in the hospital. The doctor is able to remove all of the cancer.

The men take Kenny out to celebrate and the women give Ginger a baby shower at Val's house. Three criminals break into the house to rob the women. Diana, in the kitchen, escapes and calls police. The robbers then take the women hostage. A swat team is called. Tempers flare among the men, who are feeling helpless. After 8 hours, the swat team apprehends the robbers and everybody is okay.

Jeff picks up the kids and Abby is afraid he has kidnapped them when she can't locate them. Jeff finally returns them and says they were camping. Ginger's sister Cindy visits, and gives Eric marijuana to hold for her. Sid finds it and is very upset. At a party, Cindy freaks out and runs into the ocean. Eric saves her, but she's in a coma. The doctor says the pot had angel dust in it. Eric is upset as everyone blames him, thinking it's his pot. Cindy finally wakes up, and tells everyone that it wasn't Eric's pot.

Abby comes on to Gary, but then says she's kidding when she sees how uncomfortable he is. Everyone thinks Laura's having an affair with Scooter, because of all their flirting. Laura tells Scooter that they can't really have an affair, because they're both married. Richard asks Laura if she'd like to discuss his affair with Abby, so that they can start over. Val's night school teacher is Earl Trent. He invites Val over to work on a story, and then asks her to sleep with him to get even with Gary and Judy. Val refuses and he starts to force her, but then breaks down weeping. Gary comes over and apologizes to Earl for having an affair with his wife.

J.R. comes to town (again). He wants to form a corporation with Sid and patent the engine that Sid invented. Sid refuses. Abby steals the engine plans and gives them to J.R., and has him sign a contract to protect her interests. They sleep together. Karen tells Sid that Abby stole the plans, but he doesn't believe her. Karen and Val are suspicious when Jeff comes to pick up the kids, and packs all of their things into his van. Karen goes to J.R.'s hotel to tell Abby she thinks Jeff kidnapped the kids, but Abby doesn't believe her and says Jeff is just trying to scare her again.

Jeff doesn't return the kids and Abby's really worried. The FBI question Gary about Frank and Roy, and Gary finally admits his illegal dealings to Sid. Abby claims to be innocent, and Sid believe her. Gary and Sid agree to do a sting operation for the FBI, and Frank and Roy are arrested. Sid and Gary will have to testify, so the FBI guards them. One of the mechanics at KLMotors lets the brake fluid out of Sid's car. Abby receives a tape from Jeff telling her he took the kids because she is a bad mother. Abby totally flips out, so Karen calls Sid to come home to help Abby. Sid and an FBI agent get in his car to drive home. As they drive around the road, Sid realizes the breaks won't work. The car goes out of control crashes over the side of an embankment down to the beach below.