Ryan visits with his daughter; but Terry O'Brien, her aunt and legal guardian, cuts short their time together. Ryan heads home and immediately tells Megan that he slept with Lexi in Mexico. He purposely drives her away, and also alienates Lexi with his bizarre behavior. Megan confronts Lexi and quits her job. Michael agrees to team up with Lexi after his ploy to win back Megan fails. Ryan vanishes for several days before Kyle finds him at the blacktop courts. Ryan reveals that he was married as an 18-year-old. His family was in a car accident; he pulled his infant daughter to safety, but the car erupted in flames and killed his wife. He is still wracked with guilt, and has kept a promise to Sarah by never remarrying. The parole board plans to send Eve back to prison for fraternizing with Jackie, but Amanda comes to her rescue. Peter and Eve fly to Texas to consider a bid on his father's old land. He returns home to defend himself against Dr. Shulman's attacks, but winds up resigning. E

Lexi buys the apartment building, using a front so that Amanda will unwittingly accept her offer. She takes over as landlord, prompting Amanda and Kyle to move in with Jane temporarily. Michael and Lexi drug Ryan, then snoop in his apartment and find information about his trip to New York. They pose as a priest and nun to gain entry to the boarding school and meet Sarah. Lexi, claiming to be Megan, convinces Sarah to give Ryan permission to remarry. Megan goes to work at AWA and steals Lexi's clients. Michael stops Lexi from attacking Megan, so she agrees to join him for drinks. Ryan comes to Megan's apartment to tell him about Sarah, only to find a naked Michael hiding in the closet. Peter and Eve agree not to spend their money, but she accepts an offer to buy half of Kyle's club. Eve bitch-slaps Dr. Shulman when she continues to make trouble at the hospital. Peter buys the hospital and implements more patient-friendly policies. He allows Dr. Shulman to purchase a seat on the board of

Michael and Ryan get into a scuffle, and Megan cracks Ryan over the head with a lamp. Lexi tends to Ryan's wounds and convinces him to sleep with her. Megan finally learns that Ryan has a daughter. Sarah overhears Terry threatening to keep her away from Ryan forever. Ryan decides to have Sarah come live with him. He and Lexi try to visit her, but discover that she has run away. Sarah turns up on Megan's doorstep. Amanda devotes all her time to landing the account of millionaire Tony Marlin. When Eve joins Amanda and Tony for an evening out, drunken college guys trash the club. Tony hints that he will only sign with AWA if Amanda helps him land Eve. Kyle and Jane nearly kiss and later dine together. Dr. Shulman stops interfering with hospital business after she and Dr. Visconti fall for each other.

Ryan learns Sarah's whereabouts and sends her to the beach house to stay with Kyle. Lexi tries to win Sarah's favor through bribery. Sarah encourages Ryan to repair his relationship with Megan. He decides to fight for custody of Sarah. After being rejected by Megan and Ryan, Michael and Lexi have sex in the laundry room. In order to please Tony, Amanda makes Eve the spokesperson for the cruise line. Peter is angry because the commercial conflicts with their Hawaiian vacation, but Eve appeases him by asking him to come along on the cruise. Amanda must fire half of her staff to finance the commercial. When Kyle discovers that Jane is among the casualties, he accuses Amanda of being heartless and threatens to end their marriage. Amanda and Jane quarrel over Kyle. Amanda walks out on Kyle because she believes he is trying to control her. He sells the other half of the club to Eve so that he can buy Amanda's stake in their house. Amanda comes to the club to seek Kyle's forgiveness, but they

Tony orders Amanda to distract Peter throughout the cruise so that he can put the moves on Eve. Amanda accompanies Peter on a day trip to an island and ensures that they miss the boat. Tony tells Eve that Amanda promised her to him as part of their deal. Eve causes him great pain, and later ends her friendship with Amanda. Peter and Amanda sleep together and confess that they have never gotten over each other. Lexi decides to seduce Tony to steal his account, much to Michael's dismay. Ignoring a threat from Tony's unstable wife, she destroys the film from Amanda's commercial, before coming on to Tony and asking him to keep her in mind as a second choice. Terry has a social worker take Sarah away from Ryan. Ryan defends Terry against allegations of child abuse. Terry allows Ryan to have custody of Sarah, but will stay with them for the summer. Megan notices that Terry seems a bit too affectionate toward Ryan. Kyle and Jane move very quickly in their relationship.

Amanda loses Tony's account because the commercial footage was destroyed. She decides to shut down her agency. Peter ends his marriage so that he can be with Amanda. Jane and Kyle nearly split up because of his insistence on consoling Amanda. He catches Amanda and Peter sharing a hotel room, and Eve overhears this information. Eve beds Travis, the ex-prison guard who harassed her, but he refuses to do her dirty work. She goes totally psycho and plots revenge against everyone. A jealous Michael tries to stop Lexi from sleeping with Tony. He helps her escape a potential confrontation with Mrs. Marlin. Tony comes to Lexi's apartment to close the deal, but dies in her bed. Terry lusts after Ryan, who is initially oblivious to her advances. He finally tells her that he is not interested and proposes to Megan.

Lexi fears that the police will accuse her of killing Tony and forging his signature on the contracts. Michael helps her dodge suspicion by returning the body to Tony's mansion. Michael asks Lexi to marry him. Lexi befriends Eve in the hopes of gathering dirt on Amanda. Eve experiences flashbacks about high school, and recalls that Amanda and Kent were lovers. Dr. Visconti puts her under hypnosis to trigger her memories. Lexi takes Eve to the murder site, where she realizes that Kent did not die from his fall; Amanda beat him to death and tricked her into accepting blame. Megan catches a naked Terry kissing Ryan. She wants to call off the engagement, but Terry apologizes and admits that she caught Ryan by surprise. Terry pretends to leave town, and Ryan and Megan get married. Terry kidnaps Sarah and crashes her car into a utility pole. Jane discovers that she is pregnant, but doesn't tell Kyle.

Sarah and Terry escape serious injury because of the airbags, and Kyle and Ryan pull them to safety. Terry apologizes and grants Ryan and Megan permission to raise Sarah. Amanda tells Peter that she killed Kent, but claims that it was self defense. Lexi wants to go to the police with Eve's revelations about Amanda. Eve hits her over the head and leaves her bound and gagged in the bathtub (in her underwear). She reveals that she plans to murder Amanda and Peter. Eve tries to deflect suspicion by pretending that she is over Peter and insisting that her repressed memories were just fantasies. Dr. Shulman has Peter investigated for fraud and embezzlement, as his efforts to cover for Michael left him holding the evidence. He and Amanda plan to flee the country to escape prosecution. Kyle is thrilled to learn of Jane's pregnancy, but she discovers that Michael is the father. She tells Megan that she is leaving town. Amanda overhears this from a bathroom stall and warns Kyle as she stops by t