Sandy comes to Ryan's rescue once again, after he has a difficult stay in Juvenile Hall. Seth makes Kirsten aware of his anger over Ryan's situation, and Kirsten makes a compromise. Ryan's mother, Dawn, makes a surprise visit to Newport, and things don't go quite as she and Ryan may have planned. The monetary secret involving Julie, Jimmy, Kirsten and Sandy comes to a head.

Ryan takes a job at the Crab Shack diner. A co-worker at the diner might mean bad news for the Newport kids. Ryan asks Marissa out on a date. Sandy attempts to help Jimmy sort out his life, and gives him some bad news. Julie reveals a long-held secret to Kirsten. Disaster strikes at another one of Holly's parties.

Seth and Kirsten want to avoid facing the world after their respective displays at Thanksgiving. Sandy has some advice for Jimmy, which doesn't sit well with Julie. Ryan and Luke find themselves getting along after an O.C. loved-one comes out of the closet to face negative reactions.

It's New Years and "love" is in the air. A sister returns home, and throws a party. Oliver casts his spell. Sandy and Kirsten find themselves in a rut, and out of their environment. Seth finally makes a decision between Summer and Anna. 2004 is born.

Sandy reluctantly serves as host/auctioneer at yet another OC benefit; Trey lies to Ryan to prove that he can be self-dependent; Carter reinvigorates Seth and Zach's comic book dream, much to the annoyance of Summer. Marissa moves in with the Cohens.

Sandy and Matt's hospital project hits a roadblock. Kirsten and Julie run into troubles of their own with their matchmaking business. Marissa confesses her feelings to Johnny. Summer finds out out about Seth.

Ryan and Volchok make a deal after a fallout at prom. Sandy is chosen as Man of the Year, but this sparks the DA to dig deeper into his involvement with the hospital problems. Marissa goes and sees Kaitlin at her boarding school and Seth visits the Newport Group HQ and lights up the joint.

Seth works at a comic book store in Newport. Kirsten drops by the store to ask Seth if he has something to send Ryan in a "care package" she is preparing. Later, Seth tries to talk Ryan into coming to dinner at the Cohens' but the latter isn't easily persuaded, saying he works nights, etc. At her dorm, Summer and a friend named Che try to rally students for a protest. Summer gets a phone call from Taylor who seems to be in Paris.

When Seth visits Summer, she realizes that her materialistic, gossiping self may be forever gone ever since she went to Brown. Ryan helps Taylor with her divorce. Temptation stirs when Kaitlin and Julie vow to stay out of trouble. And Sandy longs for a guy's night out.