Julia breaks down to beg Angela for protection against the ruthless inmates and prison matron who are out to kill her. Angela pays the matron off to make things easier on Julia. Maggie uncovers evidence that Dr. Lantry's paychecks are supplemented by a mysterious and handsome additional income. Dr. Lantry is feeling the heat from Chase and Michael's investigation into his competency and ethics as a doctor. Afraid of being implicated by Lantry, Angela threatens Dr. Hooks into dropping any inquiries. Maggie's sister, Terry Hartford, discovers that Maggie has become wealthy and heads for Falcon Crest.

Angela desperately protects herself when she discovers that Chase and Michael's investigation into Dr. Lantry's underhanded past points to her. After Angela reveals to Lance that Melissa and Richard Channing are having an affair, Lance, boiling with anger, sets out to find them. Melissa covers by telling Lance that she's trying to maintain Richard as an ally, while Richard has his eyes set on Pamela. Linda's father refuses to acknowledge Cole as part of his family, while the newlyweds start a custody battle for baby Joseph with Melissa and Lance. Maggie's sister Terry seeks her fortune in Tuscany Valley by manipulating her way into the Gioberti's home.

Railroaded by Angela, Dr. Lantry is jailed, but now he poses a bigger threat to the wine baroness who fears he will turn the state's evidence against her in court, implicating her in the attempted murder of Chase. Philip arranges Lantry's bail and plans to have him sent out of the county, but Chase and Michael are determined to prove that Lantry is allied with Angela. Angela investigates Terry's dark past with plans of using her to destroy the Gioberti family. After discovering that Terry had been a prostitute in New York, Angela uses this fact to force her into stopping Cole's custody suit. Meanwhile, Terry, scheming to gain wealth, plans to overtly flirt with the men of Falcon Crest. At the same time Richard is incensed to learn that the cartel demands 100 percent control of his racetrack and will stop at nothing to get it.

Lance betrays Angela by revealing to Chase where Dr. Lantry is hiding. Chase accuses Angela of having arranged Lantry's bail and tells her that he found out from Lance. Angela denies everything but can barely control her fury over Lance's betrayal. Chase locates Lantry, who confesses that Angela had blackmailed him into signing the affidavit concerning Chase's incompetency. Before Chase can stop him, Lantry injects himself with a lethal dose of morphine. When Osborne's dead body is found on Richard's property, this not only further tarnishes his already scandalous reputation, but poses a threat to Richard's own life. Meanwhile, Michael warns Richard that his inheritance is in jeopardy, and Philip is exposed as the publisher's business associate.

As Dr. Lantry nears death, Chase realizes that he may lose his only opportunity to see Angela behind bars. Lance boldly threatens Angela and Melissa with blackmail, and at the same time, Angela works with Philip to admit Julia into a mental institution. Terry slithers her way into Michael's heart, while Angela blackmails her for devotion. Vince Caproni, bitter about Linda's marriage to Cole, tells Linda that Angela's cruelty to migrant workers caused Linda's mother's death. Angela forces Terry to spy on the Giobertis, or else Angela will reveal Terry's seedy past. Chase discovers a clause in his grandfather's will that gives him the legal right to oust Angela from Falcon Crest.