After 5 weeks, no one can find Peter. Val grieves over Ben, and makes up with Laura. Abby's really worried about Olivia, who has been having nightmares, and has reverted to infantile behavior. Mack becomes friendly with a man from his messenger service, Al Baker. Paige goes to Greg, concerned about her paternity. He plants a passionate kiss on her to prove he's not her father. Then Mack and Paige discover that they are both allergic to cantaloupe, so he must be her father! The crack at the Lotus Point playground gets worse. Workmen say it's structural, and needs to come out. Abby just wants it patched, but Gary and Karen out vote her. The workmen remove the cement and find Peter's body.
Laura tells Greg that Richard has remarried and she's going to bring the boys to visit him. Jill tells Gary about memories of Peter growing up. Police find Olivia's locket on Peter's body, but don't know who "OC" is. Police question everyone at Lotus Point, and several people tell them about Abby's fight with Peter. Abby explains it was just a spat, that she felt Peter was taking up too much of Olivia's time on the drug committee. A lot of people personally suspect Abby. Olivia doesn't want to go to the funeral, but Abby tells her it would look suspicious. Gary hears Olivia begging Abby not to make her go inside. Gary tells Abby that he thinks Olivia killed Peter and Abby is covering for her. Abby slaps him.
Al Baker starts to hang around Mac's office, and Peggy suspects he's homeless. Mac agrees to let Al sleep in his office. Peggy comes by with dinner, and finds the office filled with homeless people. Paige has nightmares, and Mac thinks it's odd that Paige left Peter several friendly messages when he knew she was mad at him. Olivia's scared to talk to Mac and Detective Garcia, and runs to Val's instead of meeting with them. Gary wants to get an attorney, but Abby says that will just make her look guilty. Detective finally questions Olivia, and takes out the locket. Olivia says she had given it back to Peter. Detective. Garcia pats her on the shoulder, but is really taking fibers from her school uniform. The fibers match fibers found on Peter's body, and police go back and accuse Olivia of the murder. Abby says she killed Peter.
Laura returns home and tells Greg she left the boys with Richard. Jill's angry that Gary doesn't think Abby killed Peter, and she tells him to stay out of the investigation.Out on bail, Olivia tells Gary that Abby killed Peter because of her. Gary laughs with relief, because he knows that Olivia didn't kill him. Gary calls and tells Abby, who then sits down with Olivia to talk. They explain how they each thought the other had killed Peter, and laugh and cry and hug. They go to the police and tell the truth. Paige continues having nightmares, and Mack asks her about her friendly phone messages to Peter. He asks her to tell him everything that happened at her last meeting with Peter.
Lilimae is worried that Val isn't getting over Ben, and tells her she should try smile therapy. Al lives in his station wagon, and brings it to the MacKenzies to show Mack. Lilimae is very rude to Al, so he tells her to try smile therapy. Val buys a sportscar. She tells Gary he is the father of the twins. Jill tells Gary that she is sick of his ex-wives, step-children and secret children, and moves out. Later they make up, and she moves back in. Paige admits to Mack that Peter fell on a spindle when they argued. Since it was an accident, the police don't press charges, but Mack says she needs to apologize to people she hurt. Paige apologizes to Greg, who says she's lucky that Mack is her father because he'd hang a snot like her out to dry. Paige tells Abby she's sorry Abby is off the hook, and Abby says that she is going to get Paige for this. Laura quits Lotus Point, and tells Greg in a round-about way that she is dying.
Laura has an inoperable cancerous brain tumor. Greg drags her from Doctor to Doctor, who all say the same thing. Laura finally tells Greg he needs to accept it. Laura takes Karen shopping and buys dresses for Meg's 1st, 2nd, 3rd and 4th birthdays. Karen guesses Laura is dying and is very upset. Laura asks Mac and Greg to be Meg's godparents. Greg is late to the Christening, as he's outside in his car sobbing. Laura makes a schedule for Greg to follow with Meg, such as when to get her a library card. She tells him that if he's great to Meg, it'll make up for all the times Greg was rotten to her. Greg's furious that Laura wants to go to a clinic to die - he wants to be there for her. She says she doesn't want him to see her die or remember her that way. Greg is devastated as Laura packs. She leaves some video tapes in a hatbox. Meg is crying, and Laura brings her to Greg. She watches Greg feed Meg, and then gets into her car, and drives away crying.
Michael saves a girl - Jody - from drowning, and is embarrassed when he makes her out to be a hero. Greg hires a nanny, stressing it's only until Laura returns. Lilimae warms to Al, and he asks her out. She's shocked that he lives in his car, and they have dinner by the side of the road. Romance begins to bud. Olivia still grieves Peter, so Abby tells her about her first love, Charles. Gary is hurt when Val doesn't invite him to the twins first birthday party. He tells Val he wants to be in their life, but she says no. Gary implores Lilimae's help. Val tells Lilimae that Gary is unreliable, and how many fathers can the twins lose? Val finally relents and brings the twins to the ranch to see Gary. Jill doesn't like this. Karen meets with some men to arrange a convention for them at Lotus Point. She's shocked when she meets their boss. It's Abby's old boyfriend Charles.
Eric visits and has a surprise - he's married! Karen doesn't like his wife Linda. She also doesn't like Michael's new girlfriend Jody. Val invites Gary to dinner, and after the twins are asleep they kiss passionately, but he leaves. Abby meets Charles for lunch and asks him if leaving her was the worst mistake he made in his life. He says he's the most miserable man in the world. Flashback Scenes: Young Abby meets Charles when Sid fixes his car. He asks her out, but is angry that she won't sleep with him. She eventually gives up her virginity to him, and tells Karen she is going to marry him. Later, Karen shows her the Society Page, which has an announcement of Charles marrying someone else. Charles explains to Abby that Judith will be a more appropriate wife for him, and they'll all be happier in the long run, but he'd like Abby to continue to be his mistress. Abby leaves him, but is devastated.
Karen plans a reception for Linda and Eric, but doesn't warm to her. Michael is irritated at Jody's neediness and insecurities. Al proposes to Lilimae, who says she can't leave Val. Finally, Lilimae tells Al she won't marry him, but will live with him. They buy a motorhome and leave Knots Landing. Gary spends lots of time with Val and the twins. They laugh about how everyone thinks they're having an affair. Abby tells Jill that Gary and Val are using the twins as an excuse to see one another, and that Jill no longer excites Gary because the cheating excites him, not the woman. Abby waits at a restaurant for Charles, but then his secretary calls and says he's overseas. She remembers trashing her room after she left Charles, and vowing that she would never let a man hurt her again. Greg misses Laura terribly, and tells Meg about all the things they'll do together when she's back. Then he gets a call from the clinic that Laura is dead.
Everyone gathers at Greg's, who pretends he is fine. Richard shows up with the boys, and says it is very telling that Laura chose to die alone rather than with them. Val is furious that Karen didn't tell her Laura was dying, and she goes off and screams at everyone that they all treat her like she can't handle anything, but she has news for them - she can. She rejects Karen's attempts to talk to her. She later talks to Gary, who is miserable that he always screws up everything in his life. Abby slams everybody to the maid. Mack gets a little drunk and makes unintentionally funny remarks that crack everyone up. Greg and Mac go to pick out a casket. Greg sees an old man who can't afford a nice casket for his wife, so Greg tells the mortician he'll pay for the woman to have a top-of-the-line funeral. Mack confronts Greg on his lack of emotion, and Greg is offended.
After Laura's funeral, everyone goes to Greg's. Mac is belligerent and snide. He spends all his time with Meg. Karen overhears him tell Gary that he's a father who never got to raise his kids. Richard tells Karen that Laura emasculated him, but he's matured a lot since then. Jill's upset that Gary is taking care of fragile Val. Jill starts to drink heavily and gets drunk. She tells Val that she lost her family and wants to help with the twins. She steals Peter's ashes and puts them in her purse. Jill then drunkenly goes up to Paige and asks her how she can sleep at night. Jill whacks Paige in the back with her purse. Everyone watches Laura's videos and cry their eyes out. Val and Karen cry and make up. Greg watches his video of Laura by himself, and sobs. He asks how she could leave him all alone, because he loves her. On the way home, Jill scatters Peter's ashes off a mountainside. On tape, Laura reads "Goodnight Moon" to Meg.
Greg hires Paige to buy him investment art. Charles tells Abby that marrying Judith is a mistake he's lived with for 20 years. She screams that she hates him, but he kisses her and they sleep together. Gary and Val make love. She feels guilty about Jill, and rejects Gary after he helps her and the twins decorate the tree. Val tells Gary it was a mistake and she doesn't want him coming over anymore. He storms out. Gary tells Jill that he doesn't love her, but wishes he did. Jill confronts Val, and tells her that she could give Abby lessons in manipulation. Jill moves out of Gary's but then returns. Greg drops Meg off at the MacKenzies, saying he has business in New York.
Greg grieves for Laura. Paige is suprised to find Greg at home, but he tells her he's still in New York. He calls the MacKenzies and says he's been delayed and will be gone longer. Abby and Charles have a romantic day at an amusement park and horseback riding, but then Judith calls and Charles says he has to leave. Instead, Charles comes back and tells Abby he can't leave her and make the same mistake twice. Johnny Rourke, an "Irishman", tells a woman on an airplane that he is flying to see his girlfriend Paige Matheson. He steals the woman's credit cards, and later buys a gun in a bar. Val tells Gary about Jill's visit, and that they should just remain ex's. Gary's angry with Jill, but Jill says she told Val he's a free man, so Val must not want him. New Neighbors, Frank and Pat Williams, move into Laura's house with their daughter Julie.
Johnny wants to blackmail Paige for helping her with her fake death, but she tells him everyone already knows. Mack invites Johnny to stay with them, much to Paige's chagrin. While Karen is out of town, Meg gets really sick. Pat comes to the rescue and tells the hospital what's wrong in medical terminology. Mack asks if she's a nurse, but she says no, the same thing happened to Julie. Paige tells Greg about what happened, and he and Mack stay with Meg at the hospital. Greg sings to her. Karen rushes back, and Greg and the McKenzies realize what a bond Mac and Karen have to Meg. Meg is okay. Judith comes to town, and Abby is upset that Charles jumps at her every command. Judith tells Abby he will never leave her, and Charles packs to go home with Judith. Abby is really angry. At the last minute, Charles decides not to go home, and asks Abby to marry him.
The MacKenzie's miss Meg when Greg takes her home. Later, Greg asks them to watch her again. Johnny cons his way into staying at Lotus Point, and spies on another guest. He steals money from this man, then tells him, and gives it back. The man say's he'll get Johnny a job. Charles brings Abby to meet his friends, and Judith shows up. She is very snide to Abby, so Charles tells Judith he has asked Abby to marry him.Val and the twins decorate the house for Gary's birthday, but Jill has planned a surprise party for him, so Gary doesn't get to Val's until the twins are asleep. Val's furious, and yells that he has no sense of responsibility. Their argument wakes the twins, and they call Gary "Daddy." Jill's upset that Gary didn't come home with her. Gary tries to make up with her, but she tells him he has to make a choice. Later, she apologizes and says that he doesn't have to abide by Val's terms. She reminds him she is a lawyer, and says she will help him.
Judith and Charles don't want to divorce until a merger goes through, so Abby enlists Greg's help to mess it up. Judith secretly tapes Abby, and tells Charles that Abby used inside information. Charles says he doesn't care - he loves Abby. Michael fends off Jody's advances and tells her he doesn't love her. She's very upset. The MacKenzies have the Williams over for dinner, and Frank acts strange. Mack is sure Frank is a cop. It's too late for Gary to appeal for paternal rights to the twins, so Jill draws up an official sounding letter for Val to sign, naming Gary as the twins' father. Val's upset and decides to get her own attorney. When Gary comes to visit, Val goes off, screaming that he is not the twins' dad, and to never come back.
Johnny delivers packages for the shady business man, and a woman accidentally sees them. Michael won't take Jody back, and when he sees a woman jump off a cliff to her death at the beach, he thinks it's Jody, but it's actually the woman who walked in on Jody. At a gallery opening, Greg asks Paige to introduce him to a woman who catches his eye. Paige is jealous and gets drunk. She goes to see Johnny and they sleep together. Frank is super paranoid, and Pat is worried that his paranoia is what will call attention to them. Karen is called to give a deposition in the twins' custody case. She tries to get Val and Gary to work it out. Val asks Karen to lie and say the twins aren't Gary's, and Karen doesn't know what to do.
Paige continues to be jealous of Greg's interest in other women and sleeps with Johnny. The MacKenzies are suspicious of the Williams' and speculate that Frank and Pat don't have custody of Julie. They see a woman come and pick Pat up in the middle of the night. Karen and Mack tell the truth in their depositions, and convince Val to tell the truth, that Gary wants visitation, not custody. Charles suggests to Abby she expands the marina at Lotus Point. He loans her the money, not telling her he is the front for investors. Charles gives her plans he had drawn up, but Abby finds they were made before he came back into her life. She hires a detective to investigate him. Charles' divorce is final, so Abby wants to get married ASAP.
Pat returns from testifying. Frank is upset because if Pat hadn't agreed to testify, they wouldn't be in the Witness Protection Program. The MacKenzies wonder if Greg is ever going to pick up Meg. Val tells Gary he won't get custody of the twins. Abby tells Charles that Lotus Point can't afford to expand the marina. Charles says it will be her wedding gift, and gives her a check for $2 million. Abby and Charles get married in Lake Tahoe. The next day, Abby has her attorney annul the marriage, and tells Charles she knows he only wanted Lotus Point. He admits he did, but then fell in love with her. Charles wants his money back, but Abby has already cleared the check. His investors tell him to just let her have it to avoid publicity. Charles goes back east. Abby is really upset, and Olivia gives Abby her wedding gift - a star she had named after them.
Paige tells Johnny that he's just for sex, and she won't go out with him. Abby loans Lotus Point the $2 million to build the marina. Olivia's really upset that Abby called off the wedding, and yells at her for stealing husbands and not keeping a man or giving her a normal life. The MacKenzies are very upset and miss Meg terribly when Greg brings her home. Greg builds a playhouse for Meg, but realizes how tough it will be to raise her. Upset, he brings Meg back to the MacKenzies and asks them to be Meg's parents. He wants them to tell Meg about Laura, but says he will stay out of their life. Seeing how upset Mack and Karen are without Meg, Val has a change of heart. She signs the paper saying Gary is the twins' father. She gives it to him and says she knows he loves them, and would want him to raise them if anything ever happened to her. He says she's a good mother and rips the paper up. They hug.
Harold Dyer, who breaks arms for a living, takes Olivia out for a date. His uncle Manny tells him that Olivia is Abby's daughter. Olivia invites Harold and Manny to meet Abby. Manny tells Abby he rents yachts, and Abby introduces him to Karen, hoping to get his business for Lotus Point. Karen suspects Paige has a crush on Greg. Gary's tired of Lotus Point and decides to become a silent partner. Mac and Jill prosecute a little old woman for forgery. Jill dresses up in lingerie and cooks a romantic dinner, only to have Gary come home with Val and the twins. Gary thinks its hilarious. Later Jill's upset when she comes home to find a note from Gary that he's with the twins. Upset, she begins to drink.
Paige starts to work for Greg exclusively, and is frustrated when he doesn't pick up on her hints that she'd like to date him. A man can't pay Johnny and Harold money he owes, and gives him a diamond bracelet. Harold roughs him up anyway. Harold gives the bracelet to Olivia, saying it was his grandmother's, and encourages her to respect Abby. Gary invites the twins to a sleepover, and makes Jill stay in the guestroom. They don't include her as they play, and she starts drinking again. Pat is a doctor, and is testifying against another doctor who had mob ties and was a drug dealer. At her testimony, a man stabs her but only gets her arm. Karen and Mac see this on the news, and when Pat returns with a bandaged arm, they realize that she is the doctor. Val gets a letter that says "Out of Danger. I love you and will see you soon. Love Ben."
Val is excited and prepares for Ben's return. Paige tells Greg she likes him and he says she must be joking. During a meeting, Manny is taken with Karen and flirts with her. Abby tells Karen to use this to get a better deal from Manny. Mac isn't jealous until he sees Manny. Harold and Olivia declare their love, but he says they can't sleep together until they're married, and he proposes. Abby is furious, and tells Manny she'll back out of the deal if he doesn't stop Harold. Abby calls Gary to help with Olivia, and a drunken Jill is furious. Paige agrees to go to Mexico with Johnny, and Harold and Olivia decide to go with so they can elope. Jill works out a deal for the little old lady forger, and has the woman write another letter to Val from "Ben".
Gary confronts Jill on her drinking, and calls her sick when she tries to get him to drink with her. Karen is shocked when Manny tries to kiss her. In Mexico, Paige meets Debby, an archeology student, who tells them of a pre-Colombian dig. Paige tells Greg she can get him statues, and he agrees to finance it. Paige is upset to find Johnny in bed with Debbie, but they make up. Manny sends a goon to Mexico to stop the wedding. Harold breaks up with Olivia, blaming it on his uncle. Harold tells her his uncle is dangerous, and he can't cross him. Olivia goes home and cries on Abby's shoulder, and Abby agrees to talk to Manny about letting Harold date Olivia. Olivia goes to Harold, and Manny knocks on the door so he hides her in the closet. Manny tells him he has to leave, as Abby said if he doesn't send Harold packing, Abby will back out of the yacht deal. Olivia hears the entire conversation.
Gary sees Manny unloading a yacht in the middle of the night, and thinks it's suspicious. He tells Mac who asks Frank to investigate. Jill apologizes to Gary, and he says he'll give her another chance. Jill edits an old news tape of Ben's, and then leaves a message on Val's answering machine that says "Hi, it's Ben. God I've missed you and the kids. I want to, I hope you can hear me, this phone system is..." then Jill cuts it off. When she hears it, Val's elated. Olivia tells Karen about Abby breaking her and Harold up. Karen tells Abby she knows. Olivia is too controlled, which worries Abby. Olivia starts giving away her posessions, and gives Manny a letter for Harold that says how much she loves him, and she'll think of him at the end. Manny shows Abby, who thinks Olivia will commit suicide.
In Mexico, Johnny has orders from Manny to make sure the archaeological dig doesn't stop highway construction. Paige wants the highway stopped to find art. Hoping to stop it, she buries one of Greg's pre-Colombian statues for the students to dig up. Johnny sets the encampment on fire. Karen's furious that Mack is checking out Manny, and thinks it's out of jealousy. Frank tells Mack that the yachts are a front for bringing cocaine in from Mexico, but they don't have enough proof to hold up in court. Val listens to the tape from Ben over and over. Jill steals the key to Val's house and replaces the tape with a blank one. Olivia is found passed out at Harold's after overdosing on pills. Abby's very upset and waits at the hospital with Karen and Gary. Olivia wakes up and screams for Abby to get out. They doctor tells Abby that it's better if she doesn't visit Olivia.
Paige invites Michael to Mexico. Manny instructs Johnny to send Paige home because she's causing delays, but she won't leave. The piece of art is found, and declared a fake. Angry, Paige decides to go to a reporter. Manny tells his men to kill everyone at the site, and to make it look like it was done by Mexicans. The police tell everyone at Lotus Point to act natural as they investigate Manny. Then the police halt the investigation, saying Manny works for the government in covert operations. Olivia goes home, but refuses to speak to Abby. Jill calls Val and plays another tape of Ben and hangs up. Val plays "Ben's" tape to Gary, but it's blank. Jill convinces Gary that Val's probably going crazy and might be suicidal. Dropping off the twins, Jill overhears Val tell neighbors that she is so wound up about Ben that her doctor prescribed sleeping pills, but she won't get them. Jill steals the prescription and gets it filled.
Mack doesn't believe Manny works for the government, and finds out he is a gun runner. Gary and Abby decide to come up with a plan.In Mexico, strange things happen on the site so the director closes it down. Paige talks to the reporter, and as the reporter drives away, her car blows up. Pat invites Val to watch videos and says she'll send Julie over to baby-sit after dinner. Jill tells Gary she is going to a conference in San Francisco. Wearing a disguise, she buys a junket car and hides a gun in it. On the plane and at the conference, Jill introduces herself to lots of people. She seduces a man named David, and slips a pill into his drink. She takes him to her room where he passes out. Jill undresses him and messes up the bed. She calls Gary, then tells the hotel operator to hold her calls until the next morning. Jill flies back to Los Angeles and dons another disguise. She drives to Val's in the junket car, and lets herself into the house.
Paige and Michael find out that Johnny is working for Manny, and their friend Chavas is a DEA agent. They get on a bus. The Federales stop the bus and take Paige, Michael and Chavas. Abby and Gary fill all the slips in the marina so that Manny can't dock his boat. Manny calls Karen and says she'd better do something about it if she wants Paige and Michael to return safely from Mexico. Jill, in disguise, surprises Val. She says the letters and calls from Ben were a hoax, and she had the forger write a suicide note for Val that says Val found out Ben is dead. Julie and Frank come to the door, and Val nervously says she has to stay home because Betsy's sick. Frank remarks to Pat that Val acted strangely, like she was being held at gunpoint. Jill forces Val to take sleeping pills saying if she doesn't, she'll shoot Val, and it's better if the twins find her asleep rather than with her brains splattered all over the room. Val pleads with her, and Jill says she's sick of everyone calling her