Sydney resents Jane's new relationship with her mother. Sherry lies about the identity of Jane's biological father, but later reveals that he was a producer with whom she had slept to win a part. Amanda and Craig take a business trip to Palm Springs. When Peter arrives to surprise Amanda, he finds her having dinner with Craig and wearing a pearl necklace. Peter refuses to listen to her explanation, and trashes the restaurant. Amanda throws him out of the apartment. Taylor decides to donate one of Samantha's paintings to a charity auction. Sam (who hasn't received any money from the sales) tries to buy it back, but Sydney bids on the painting to drive up the price and make Kyle look generous. Sydney is in a bind when she accidentally buys the painting, and hopes that the man who bid against her will take it off her hands. He is actually an employee of computer genius Carter Gallavan, who buys the painting and takes a liking to Syd. Billy retrieves the painting that Sam gave to Craig. Bi

Michael tries to reunite Peter and Amanda in the hopes that Peter will again make a contribution at the office. Kyle tries to play matchmaker at his birthday party, but Amanda isn't ready to talk to Peter. Peter regains his confidence when he witnesses an accident and saves the driver with an emergency tracheotomy. Carter gives Sydney a beautiful sports car, but is too busy to spend time with her. Samantha sleeps with Billy after he secretly buys a bunch of her paintings to try to help her make it to a family reunion. Michael is reluctant to sign the divorce papers. Kimberly convinces Megan to take Michael to Las Vegas in the hopes that he will marry her. Sydney confronts Jane when her sister rejects the Andrews family to spend all her time with Sherry. Sherry's boyfriend Ed tells Jane that her mother is an alcoholic, and has begun drinking again because of her guilt about giving up Jane. Dan becomes physically abusive toward Matt.

Michael signs the divorce papers, and marries Megan during their trip to Las Vegas. Peter learns that Kimberly has a brain tumor, and breaks the news to Michael. Jane is robbed at gunpoint at the boutique. Sydney calls her parents, who come to Los Angeles to comfort Jane. Jane decides to go home to Chicago for a while, and agrees to stay in touch with Sherry. Sherry and Ed get engaged. Jane turns the boutique over to Syd, and says goodbye to her sister and friends at the airport. Alison learns that she is pregnant. Amanda gets Craig drunk during an evening out. He reveals that Arthur murdered Craig's grandfather when Craig was twelve. Matt agrees to move in with Dan. When Jake and Billy become suspicious of Matt's black eye, Dan accuses Matt of betraying him. He assaults him again. Sydney pushes Carter away when he still cannot find time for her. His assistant, Walter, tries to pay Syd to stay with Carter.

Michael insists on spending time with Kimberly after learning of her terminal illness. She reveals to Megan that she will crash her car during the next rainstorm. After it begins to rain, Megan forces Michael to drive her to Mulholland. She tells him the entire story of her relationship with Kimberly. Their car crashes into Kimberly's and flips into the air. Walter secretly pays a bill for Sydney after Taylor refuses to let Kyle bail her out. Sydney tries to tell Carter about Walter's behavior, but he interrupts to reveal that he wants a relationship. Amanda uses Craig's revelation to blackmail him. When Arthur learns that the secret is out, he confronts Craig and Amanda. He agrees to pay them five million dollars, but Craig tries to strangle his father. Arthur suffers a fatal attack. Jake and Alison get engaged. Peter threatens to ruin Dan's career unless he seeks counseling. Dan confronts Matt, who stops him from driving drunk. Dan apologizes and agrees to seek treatment.

Kimberly pulls Michael from the wrecked vehicle while Megan calls for help. Michael experiences internal bleeding, and flatlines. He dreams that Kimberly is a devil trying to lure him into the Melrose pool, while Megan is an angel who wishes to rescue him. Peter revives Michael, who credits Megan with giving him the strength to go on. Megan convinces Michael to support Kimberly in her final days. Sydney stakes a claim on Jane's old apartment, forcing Samantha to the streets. Sam seeks the legal assistance of her attorney ex-boyfriend, Kenny. Billy is about to ask Sam to move in with him when Kenny arrives and threatens to sue Amanda. Amanda declares that Sam can stay as Sydney's roommate. Syd spends a romantic weekend with Carter in San Francisco, but it is cut short when Carter discovers how to repair a glitch in one of his computer games. Walter convinces Carter that Syd is extorting money from him. Peter moves into a new house, but seeks to maintain a relationship with Amanda. Taylo

Megan becomes concerned by the amount of time Michael is spending with Kimberly. When Megan convinces Michael to ignore a call from Kimberly and spend the night with her, Kimberly suffers a seizure. Taylor discovers that the new chief-of-staff won the job because he is sleeping with Dr. Shulman. Peter uses this information to blackmail Dr. Shulman. Nick becomes suspicious of Taylor's relationship with Peter. Nick and Kyle are arrested in a barroom brawl at Shooters. Kyle offers to host Jake's bachelor party to make it up to him. Billy isn't sure that Jake and Alison are ready for marriage. Craig tries to use his expected inheritance to seduce Amanda. Roommates Syd and Samantha are at each other's throats. Billy asks Sam to move in with him. Carter continues to reject Sydney.

Kimberly persuades Michael to grant her dying wish by sleeping with her one last time. Amanda uses Craig's infatuation with her to trick him into giving her half of D&D. Craig learns that his father cut him out of the will. Peter is appointed chief-of-staff. Taylor offers to cook him a celebratory dinner, but he stands her up to go to a dinner party with Amanda. A drunken and depressed Craig shows up on Amanda's doorstep, and she lets him sleep on the couch. The next morning, Craig leads Peter to believe that he slept with Amanda. A distraught Peter sleeps with Taylor. Alison and Jake are to marry in a civil ceremony, but Alison hides in the bathroom at City Hall. Jake postpones the ceremony. Alison becomes fed up with Jake's attempts to control her and turn her into a housewife. She stays with Billy and Sam, then decides to visit her sister to avoid the meddling couple. Jake believes that Alison is going to have an abortion, but she does not. Alison returns home and moves in with Aman

Megan is furious to learn that Michael has slept with Kimberly. She forgives Michael, but then stakes out the beach house and nearly runs over Kimberly. Kimberly is astonished to learn that her tumor is in remission. Kyle gives Carter a job at the restaurant. Craig pays Nick to produce evidence of Taylor's affair with Peter. Taylor's liaison with Peter at the restaurant is interrupted when Kyle returns early from an out-of-town trip. Alison returns to work at D&D. A drunken Jake trashes the office. He leaves town, and decides to visit the home of his ex-girlfriend Colleen and their son, David. Colleen gives him advice about Alison, and he helps David deal with his anger over his adoptive father's frequent absences. Samantha is unnerved by a tender moment between Billy and Alison.