Nick follows Taylor to Peter's house and witnesses a romantic encounter. He later photographs the couple's late-night rendezvous at a golf course. Megan discovers that Kimberly's illness is in remission. Michael reaffirms his decision to stay with Megan; but she is disturbed by a visit from Josh, her former pimp. David tells Jake that he knows that he is his father. Billy disapproves of Sam's attempt to reunite Alison and Jake. Billy later apologizes to Sam, and Alison takes Jake back. Sydney and Carter are robbed at knifepoint, but Kyle punches the man out and chases him away. Carter asks Sydney to join him on a getaway in Mexico, but overhears her telling a boutique customer that she loves Kyle. When Syd arrives at the airport, Carter tells her that he is returning to his company, and wishes her a nice life.

Nick drops hints about the photos to Peter. Taylor drugs Nick while Peter removes the pictures from his apartment. When Kyle arrives home, Taylor pretends that Nick is attacking her. Nick accuses Taylor of having an affair, but cannot produce the photographs. Kyle throws him out of the building. Nick records an illicit phone conversation between Peter and Taylor. Craig drives Amanda to Peter's house, where she sees him with Taylor. She punches out Taylor and sleeps with Craig as revenge. Josh threatens to publicly expose Megan's past unless she pays him off. He tells her to meet him at a hotel room, then tricks Michael into believing that she has returned to prostitution. Josh meets with Kimberly, who had arranged his parole. She gets him a job running AV equipment at a hospital party. He threatens to run an X-rated video of Megan unless she turns one last trick for him.

Amanda rejects Craig, who seeks a relationship after their night together. Kyle realizes that Taylor has been lying to him. He visits Nick's motel room and forces him to play the recording. Nick threatens to kill Peter unless Taylor pays him $5000. Nick attacks Peter with brass knuckles. Kyle stops Nick from killing Peter, and helps him skip town. Kyle throws Taylor out of the apartment. Josh plays Megan and Kimberly against each other. Megan is arrested for soliciting an undercover cop. Michael bails her out, but breaks up with her. Matt's brother Luke dies in a plane crash. Matt is shocked to learn that Luke named him the guardian of his teenage daughter, Chelsea.