While in jail, Danny has found "the Lord." Upon release he moves in with a woman named Mia who is also religious. Danny keeps going to Val's on the pretext of getting his belongings. He tells Val he won't give her a divorce, as God doesn't sanction it. Greg's poisoning is affecting his liver, and the news hits the paper. His sister, Claudia Whittaker shows up, and Greg says "I see the vultures are circling!". Claudia's daughter Kate looks just like Mary Francis. Jeff gives Karen and Mac cell phones for protection and then experiments making a phone bomb. Karen goes to Jeff's, but he sneaks out, and then Meg calls Jeff's number thinking Karen's there. Jeff's apartment building blows up.
Jeff is presumed dead. Ann's livid that Paige's trust fund didn't go to her account, and she returns Paige's wedding gifts for money. Greg asks Paige to go away on a cruise for him. Claudia asks Greg's doctor if a six-month cruise is safe for him and the doctor says he doubts Greg will live that long. Tom comes back and confronts Greg with a gun to have his charges dropped, and tells Paige that Greg set him up. Paige is still mad. She goes to meet Greg for the cruise and asks if he's really dying, because she won't believe her good fortune until he is dead and buried. Kate gets a scholarship she was hoping for, but Claudia lies and says she didn't get it. Danny lets out all the horses at Gary's ranch. When Gary comes to the stable, Danny closes the door behind him and takes out a bat.
Claudia has Anne checked out and finds out she's broke. Anne decides to seduce Greg, but he never comes home. Tom stops by Greg's and sees Anne's clothes strewn about, and he assumes that they are Paige's clothes. Danny beats Gary up with a bat. Then he ties Gary up and forces him to drink alcohol. When Gary's nearly passed out, he puts him in a running car that goes off a cliff. Meanwhile, Danny's girlfriend, Kim, goes to see Val, and she kicks Danny out. Val waits up all night for Gary. She calls the police, knowing that Danny has done something to him. Val, Mac and the police find Gary's empty car. Danny is floating in a pool. Dead.
Karen is overjoyed to find that Jeff is alive, until he locks her in the station and tries to kill her. He says Wayne was killed in his apartment, and he sent her all the letters. Dianne is there and calls the police. Jeff lies to the police, but Dianne taped the whole thing. Gary calls a frantic Val, and says the airbag saved him, but he kept passing out from the booze. He later talks to Karen, and Karen gives her famous "Pollyanna" speech. Paige makes up with Tom and moves in with him. Anne receives compromising photos of herself and a note demanding a million dollars. Danny is found dead and police say his fingers were broken, so they'll have to investigate. The coroner tells Val she's responsible for Danny's body and she's being charged rent until she has his body moved.
The police soon realize that everyone had a motive for killing Danny, but Frank is the only one without an alibi. Karen is depressed over her attack and is afraid to leave the house. Val and Gary ask Mac and Karen to be in their wedding. Paige doesn't go to work and tries to get a new job, but isn't offered any. Linda uses Paige's absence to try to ingratiate herself to Greg. Linda's upset when she hears Greg call Paige and offer her a big promotion and raise. Kate and Greg have a nice talk, and she tells him he and Claudia are exactly alike. Anne calls her ex-lover, Marco Conti, who is rich and married, and tells him they're being blackmailed. It's actually Anne who's doing the blackmailing. Marco says he'll take care of it, and sends Nick Schillace to Knots Landing.
Nick suspects Anne of the blackmailing, and says that he is going to stay with her and go wherever she goes. Anne's upset that Marco only sent $20,000 for the blackmailer. Paige is angry that everyone at the office thinks she got the promotion for sleeping with Greg. She asks Greg why he treats her like dirt. He asks Paige to marry him, but she walks out. Greg is really starting to get sick. Karen goes back to work. Diane says Karen is an egomaniac, and that she got a new job and can't wait to leave. Police find a button by the pool where Danny was killed. Ginny decides to leave. Gary tells Val that his dreams have all come true and that he can't wait to marry her. They go on a family picnic, and the twins run to Gary yelling that something has happened to Val.
Greg gets really sick and Carlos tries to call Paige. Tom and Paige fight about her working for Greg, and she leaves. Nick makes her sleep on the sofa. Tom goes to see her at the office and tells her she's a brat and a bitch. He sees Greg and punches him. Julie has skipped school since the day Danny died, and the police think she saw something. Anne tells Nick the blackmailers called. They're to drop the money at a department store. Anne drops alarm tags into a lot of shopping bags, so all the alarms go off. Anne grabs the money and runs. Nick apologizes to Anne for suspecting her and is worried about what Marcos will do to him for losing the money. Val fell on her head, but insists she is okay. She starts acting strangely, but Gary thinks it is pre-wedding jitters.
Paige tells Mac she never loved Tom the way she loves Greg. Anne and Nick sleep together. She tells Nick that the blackmailers have called for the rest of the money and she's to meet them alone. Nick switches the briefcase with money to one with a bomb in it. Michael gives Linda an engagement ring. Julie tells the police that Danny showed up drunk when she was swimming. He slapped her and said he was going to have her arrested for trying to shoot him. Julie said she ran to the house with Danny following, and his fingers were broken as she tried to shut the sliding glass door. In pain, he staggered around and fell into the pool and drowned. The police rule Danny's death an accident. Val freaks out when Gary sees her trying on her wedding dress, and accuses him of lying to her when she shows up for the rehearsal dinner on the wrong night. She calls off the wedding.
Gary tells Karen he's backing off from Val, the "queen of her own drama". Greg collapses and Paige waits with him at the hospital. Claudia tells the doctor that Greg only wants family to visit, and lies to Greg that Paige and Carlos aren't there. Claudia's mad when she finds out that Greg is leaving the ranch to Carlos and everything else to Meg. Julie's friend Jason mouths off to Frank. Nick finds the $20,000 Anne stole, and admits there is a bomb in the briefcase he gave her. Anne has hidden it at Paige's office, but Linda has taken it. Linda seduces Harvey to get him some of Paige's reports, and then accuses him of leading her on. Finding out the briefcase is Anne's, she puts it back, and tells Paige. Anne has called a bomb threat into Sumner group. Paige takes the briefcase home. Anne and Nick decide to split the million, but don't know which briefcase has the money and which has the bomb.
Jason's father beats him. Anne and Nick take the suitcases to a luggage store and call in a bomb threat. Tom, one of the investigators, notices the suitcase is Anne's. He takes it, and with the money buys a one way ticket to Brussels. Anne and Nick go to Tom's apartment, but discover he's gone. Linda sucks up to Alex, who works for Calloway. Alex tells Calloway that Sumner Group is ripe for a takeover. Val tells Karen that Gary is messy and smells like a barn. The help tells Gary that Val left and said she'll be back when "hell freezes over". Kate tells the hospital that Paige is her cousin so she can see Greg. Greg is very happy to see her. Claudia finds out that a liver is going to another patient. Since she's not yet in Greg's will, Claudia tells them if Greg lives, he will donate money for a new wing, so they decide to give the liver to Greg.
Because Julie skipped, Frank goes to school with her and sits in on her classes. She's mortified but they make up. Jason tells Mac his father died and he lives in a foster home. Mac talks to the school who says it isn't true. Mac goes to his house and hears his father beating him. Claudia tries to keep Paige from seeing Greg, and meanwhile makes a new will for Greg with her as executor. Greg has his operation and asks Paige to marry him. She accepts. Nick and Anne get married, using Paige's name. Alex asks Linda for confidential figures, so she has him sign a contract that he'll hire her if she's fired. Gary and Karen are concerned about Val's behavior. A doctor tells them she could be having brain seizures due to her fall. Val gets her haircut, leaving the twins home alone. They climb up onto the roof to play.
Gary rescues the twins. Claudia finds out that Anne married Nick for Paige's money, and uses this to blackmail them into signing Greg's fake will. Anne's finds out there is no money left in Paige's trust. Nick has to go to Rome but tells Anne he'll be back. Linda tells Greg that Paige's Calloway report was inaccurate, so she made another one. Greg calls a meeting at his hospital room and berates Paige. Furious, she walks out. Alex tells Linda that Greg has cut his company off and is firing their management. Michael wants to get married on New Year's eve, but Linda wants to wait. Carlos brings Paige her Christmas gift from Greg - a diamond bracelet. Mac calls the police about Jason, and he is taken away. Mac later finds Jason standing in front of his house, and Mac tells Jason he doesn't have to go in.
Paige dreams she meets herself as an older woman, and is miserable because she married Greg. Greg moves his sickbed to the office. He tells Paige he had a vasectomy and wants her to sign a pre-nuptial agreement, so she calls off the wedding. Mac discovers Jason was sent home because he refused to testify against his dad. Mac and Frank go to a poetry reading at Julie's school. Jason is there, and he's sad his father didn't show up, but he's glad to see Mac. Later Jason shows up at the MacKenzie's. Anne decides to set her sites on Gary. Val goes to see the doctor, but thinks Gary paid him to say she has temporary brain damage in a plot to get the twins. Val replaces her pills with aspirin. She moves to the ranch since Gary won't let her take the twins. She gets in bed with Gary and starts to kiss him. He doesn't think it's a good idea and she goes off on him.
Mac lets Jason spend the night, but says that's not a solution. Dick Lochner tells Mac that Jason's lying, and Mac goes off on him. The next night Jason sleeps in the park. Julie's teacher Charlotte calls Frank to go to an art exhibit. Not sure if it's a date, he brings Peggy. Then Charlotte asks him out for a real date. Linda is really snide to Paige. In a meeting, Linda gives a suggestion that Greg really likes. Paige is fed up with her and complains about Linda to Greg. Karen offers to "babysit" Val. Gary goes to the gym, and is happy to "run into" Anne. Karen pays for a pizza with Val's money, and finds her pills at the bottom of her purse. Karen shows them to Gary.
Steve Brewer, a photographer, introduces himself to Kate and pretends to interview her. Linda gives Paige a report for Mrs. Richfield. Paige throws it away and has her take Mrs. Richfield's niece shopping. Linda gives a copy of her report to the niece, and Mrs. Richfield tells Greg she liked Linda's report better. Julie asks Frank to go out to dinner, so he cancels his date with Charlotte. At the restaurant Julie tells Frank she knows Charlotte goes there every Friday, so she took him there to get them together. After Val cooks the twins' hermit crabs for dinner, she agrees to go to the hospital for tests. Jason calls Mac for help. He's been beaten up and claims it happened when he hitchhiked. He asks Mac to take him home. Mac tells Jason that his father abused him too, and that he shouldn't have to live like that. Jason tells Mac to bring him somewhere else.
Mac and Karen go to court and ask to be Jason's foster parents, but the judge decides he should stay with his dad. Mac speeds off with Jason. He hides him in Val's house, but refuses to tell anyone where he is, so he's arrested. Frank and Charlotte go on a date. The doctor tells Gary that Val isn't responding to medication, but might get better on her own. Mrs. Richfield's niece Susie is hired at Sumner Group and does a terrible job. Susie puts through an account Linda was secretly trying to get to Paige, who then takes over the account. Steve asks Kate a lot of questions about her father and Claudia. He accidentally dings Paige's car, and Paige is furious with him and demands he fix it. Steve has a parole officer who says he needs to get a job and stay out of trouble, or he'll put him back in prison.
Claudia tells Paige about Anne's fake marriage to get her trust fund. Anne goes to the ranch to get a puppy, and is bored when Gary goes on and on about Val. Paige kicks Anne out. Nick finds Anne. He calls her Betty, and tells her to call him Dimitri. Steve tells Claudia he is her son and wants to know why she gave him away. She throws him out. Mack is jailed for hiding Jason, so Gary agrees to help. Val comes home as Gary is there to get Jason, and thinks Gary is hiding a woman there. Val questions the twins, who tell her about Anne. Jason's uncles go to the MacKenzie's where Paige is babysitting. They demand to know where Jason is. One uncle punches Paige, so Jason runs out of Val's to help her. His uncles force Jason into their truck and speed off.
Mac is out of jail, and Jason's returned to his father, who promises to be nice but continues to be as abusive as ever. Jason leaves and his dad follows. Nick tells Anne he was traveling with a rich woman named Betty, and she was supposed to pick something up from her relatives. Anne pretends to be Betty, and the relatives give her a doll. Kate learns Steve is her brother. Linda blows off Michael to flirt with Greg. Val overhears Gary trying to have her committed, and leaves.
Jason is unconscious in the hospital, and his dad is put in jail. Mac stays with him. Linda sleeps with Greg and breaks off her engagement to Michael. Claudia refuses to tell Steve or Kate who Steve's father is. Anne and Nick try to find out if the doll is worth something or if something's hidden in it. The dog rips the doll apart. Val comes by and yells at Anne to stay away from Gary. Seeing the dog, she takes it. Then a man breaks in and demands a vial that was hidden in the doll. Paige comes in with security to kick Anne and Nick out, and the man is arrested. Anne and Nick determine that the dog ate the vial, so they break into Gary's barn, but all the puppies look alike.
Val decides to go back to the hospital for further testing. Anne and Nick finally locate the capsule, and it has a microfiche map in it. Two different parties want it, so they make a copy and sell it to both, for a total of $550,000. They rent Tom's apartment. Charlotte tells Frank she doesn't want a serious relationship with him, so he goes on a series of disastrous dates. Claudia makes up a story about who Steve's father is, but he doesn't buy it. Linda jumps the gun on a project of Paige's, and Greg reams her out but she decides to still sleep with him. Mac finds out he will be disbarred for hiding Jason. Jason moves into the MacKenzies, and tries to be really perfect and helpful. Mac tells him to just relax and he himself.
Jason is to have a goodbye dinner with his dad, but his father doesn't show up. Finding out their money is counterfeit, Anne and Nick decide to get real jobs, but both are inept and are fired on their first day. Anne decides to blackmail Claudia because she knows who Steve's father is. Kate is shocked to learn Steve was in prison. Kate asks Greg to hire Steve. Mort assigns Steve to be Paige's assistant. She's furious, and has hated him ever since he dinged her car. Greg and Steve meet and immediately argue, but Greg likes him. Paige and Steve get stuck in an elevator for several hours and they argue. When they're finally freed, Paige goes into Greg's office, only to find him with Linda.
Doctors discover that Val has a rare virus that is causing her strange behavior, but it's curable. Greg offers Claudia a job as head of his foundation. Mrs. Richfield wants Linda to work on her account with Paige. Paige places a sexy ad on a phone date line and gives Linda's phone number. Steve tells Kate his parents were forced out of their logging business by a big logging company, and his father was killed, and his mother died 6 months later. He said he got drunk and beat up the company representative, and that's why he was in jail. Steve finds out Greg owns the logging company. Jason's paper on an American Hero has won a regional contest, and the final prize is a year abroad in Sweden. Jason doesn't want to read the paper, because it's about his father. At the ceremony Jason changes his essay to be about Mac. Michele Lee sings as several clips of Steve Shaw are shown.
Linda's mom Doris is in town, so Linda misses her meeting with Mrs. Richfield to meet her at the airport. Doris is really bitchy to Linda, and decides to fly home rather than stay with her. Greg takes both Paige and Linda off the Richfield account. Paige and Linda continue to argue and insult one another. Val is cured, and Gary suggests they get remarried. Karen throws a barbecue, and while playing with the twin, Gary bumps into Kate, breaking her arm. Claudia appoints Anne to the board of the Foundation, so Greg knows Anne has something on her. Anne tries to get a copy of Paul Galveston's will and tells Nick that Steve is worth a fortune because he is Galveston's son and Greg's brother.
Anne proposes a charity for Claudia's group to fund - but it's really to fund her and Nick. Claudia knows, and tries to delay. Michael decides to quit Sumner Group. There's a fire in the Sumner Building, and all the exits are sealed off. Most of the people for Val and Gary's rehearsal dinner are stuck there until it's evacuated. Greg and Linda use the time "constructively", and he invites her to move in with him at the ranch. Steve apologizes to Paige and kisses her. Babysitting all the kids, Julie and Jason kiss. Waiting outside of the Sumner Building, Val and Gary decide their rehearsal dinners are jinxed. They have a very tender moment, and Gary even cries. They decide to marry that night. They go to a judge and giggle throughout the ceremony.
Paige tells Steve their kiss meant nothing. Greg assigns Paige to be head of Sumner Plaza and introduces her to Brian, the architect. He asks Paige to dinner and they kiss. Brian and Linda already know one another and sleep together. Linda moves to the ranch, where Greg tries to get her to play croquet. Gary, feeling bad that he broke Kate's arm, offers her a job at the ranch. Claudia's upset as she wanted Kate to work at the Sumner group. Frank passes the bar and starts a new job at a fancy legal firm. He's mad when he finds Julie and Jason kissing. Anne and Nick steal a valuable piece of art from the Sumner collection. Anne wakes up to find that Nick has left her and taken the statue with him. Anne demands Claudia give her money or she will tell all. Claudia calls Greg and Steve into her office and tells them that Galveston is Steve's father.
Greg tells Steve that he's not entitle to Galveston's money, but gives him $250,000 and says he can either save his logging town or go to the Bahamas. Kate finds out that Claudia lied about her scholarship, and decides to move in with Steve. Julie and Jason go to a party, where a gang stabs their friend Paul. Frank forbids Julie from dating Jason anymore. Brian comes on to Paige and she sees he has a video camera running. She punches him and leaves. Brian then goes to Linda, who agrees as long as she can keep the tape. The next day Brian is missing and so is Linda's tape. Michael buys a van and tells Karen he is leaving to travel the country. Anne's landlord kicks her out. She leaves several messages for Paige that she is desperate, but Paige ignores them. Anne stays overnight at a coffee shop drinking coffee.
Anne sleeps overnight on a park bench, and her purse and suitcase are stolen. Everyone she goes to for help is too busy to see her. Steve decides to go back to his logging town, and Kate decides to help him move. Claudia goes to Steve's and hides her gun in his van. Claudia calls the police saying Steve is agitated and stole her gun. The police stop Steve's van and find the gun. Steve tells Kate that having the gun violates his parole. Steve pushes a policeman, and another officer shoots and kills him. Linda can't find her tape, but finds the one of Paige, and puts it in his car. The police question Paige as she was the last one to be seen with him. The officer calls his partner - and it's Tom Ryan! Frank decides to go back to work for Mac. The gang wants Jason to join them, but Mac and Frank beat them up and they're arrested. Karen is shot with a paint pellet by a group of teens, and chases them in her car. The teen's car is hit by a truck. The kids are all unconscious and bloody. Jas