Following his bout with Hodgkin's disease, Charlie has given control of Salingers' to Bailey and is looking forward to being a father. After a tough year of his own, a newly-sober Bailey regains his freedom and his confidence from running Salingers' as his relationship with Sarah moves from friendship into romance. After struggling in a less-than-ideal marriage, Julia and Griffin tests their vows with a separation as she embarks on her first year of college.
As Bailey rents an expensive new apartment for himself and Sarah, the responsibilities of the job are making him old before his time. And while Kirsten helps Claudia prepare for going away to boarding school, Julia discovers that life as a college freshman means dealing with some highly over-sexed classmates. Meanwhile, Charlie's over-attentiveness during her pregnancy causes Daphne to question moving in with him.
When Sarah goes home to see her parents, she overhears a phone message that seems to suggest that her mom is having an affair. And as Charlie seeks an attorney's help to gain custody of the child Daphne is having, he's told he'll have to get a job. After taking a part time job at the school cafeteria with Josh, Julia suddenly quits after Bailey gives her money. And once her new classmates at Hanover learn that she's smart, Claudia worries that it will keep her from making new friends.
As Sarah is coming to grips with her parent's divorce, Julia takes the first step towards getting on with her life. And once Sarah brings all her childhood possessions home to Bailey, she decides to try and get in touch with her birth mother again. Meanwhile, as Claudia stays in to study at the risk of losing her new friends, it's clear that Charlie and Daphne are not connecting as prospective parents.
When Daphne is ordered to bed for the last eight weeks of her pregnancy, Kirsten suggests giving her a baby shower to cheer her up. And when Will returns unexpectedly from college claiming he's avoiding an obsessed classmate, Julia warns Ned that nothing can happen between them. Meanwhile, Jamie arrives unannounced to see Claudia at school. As Bailey and Sarah worry about Will's unsettling behavior, Claudia realizes that she's no longer in love with Jamie.
As Sarah invites Hannah to stay with them while dealing with her pregnancy, Bailey is in no mood to listen to Will's excuses for running out on her. And after deciding to tell Maggie about their feelings for one another, Ned and Julie hold off after learning her pet dog died in an accident. When Charlie is forced to rush Daphne to the hospital, he must decide whose life is more important -- Daphne or the baby.
Following the birth of her daughter, Daphne nervously waits to go home from the hospital. While Bailey makes it clear to Sarah that he isn't ready to have any children, Maggie throws Julia out of their room. As her breech with Maggie widens, Julia finds it impossible to continue working on a class project together. But when the professor refuses to cooperate, Julia is forced to drop the class.
As Bailey tries persuading Sarah to join the Salinger family for Thanksgiving, Charlie loses Owen at the mall. As Charlie frantically searches for his little bother, Julia works on Ned to come to Thanksgiving dinner while Kirsten asks her husband Paul to do the same. Calling Daphne for help, Charlie insists that she not tell Claudia. However, when Bailey and Griffin learn what's happened, they hurry to help with the search.
Because of the demands of tending to the new baby, both Charlie and Daphne are seriously sleep deprived. As a result, it's increasingly difficult for Charlie to make good on his many promises to Owen. Begging off an invitation to a family dinner, Ned says he's skipping parent's weekend at school to study and take in a movie. But, after Bailey finds that a successful restaurateur is planning to locate across the street from Salinger's, Julia learns that Ned may be lying about his plans.
In their struggle to get some sleep, Charlie and Daphne hire a nanny for Diana. Meanwhile, when Julia learns that Ned is caring for his autistic brother, she ignores his warnings and shows up at the restaurant where they are eating, only to be stunned at Richie's violent outburst. Wanting to spread some of an unexpected tax refund around, Bailey offers to treat Charlie and Daphne to a night on the town.
As her mom arrives unannounced for Christmas at the Salingers, Daphne heeds Charlie's advice and makes an effort to reconnect. Doreen makes it clear she and her boyfriend Les are going to take advantage of the stay for a vacation of their own. Meanwhile, the threat of Ned's being on academic probation if he doesn't get an "A" on a paper persuades Julia to stay and help before heading home for Christmas.
Daphne seriously questions her abilities as a mom and quietly begins making preparations to leave. As Daphne's unexplained absence forces Bailey to fill in, he offers to take Owen camping like Charlie promised. Meanwhile, as Paul sets Kirsten up to care for sick children at the hospital, Julia is unable to keep Ned from learning about Maggie's new boyfriend. And though Ned insists he isn't jealous, he pressures Julia to move in with him just the same.
With Bailey and Claudia trying to help Charlie come to grips with Daphne's leaving, Julia does her best to avoid Ned. While she's able to keep Maggie in the dark about Ned's attack, a surprise visit to the campus leaves Griffin suspecting something's wrong. And as Kirsten makes sure that Charlie and Diana will be all right, Paul agrees to adopt a baby as soon as possible. Meanwhile, an armed robber in the restaurant takes Bailey and Sarah by surprise.
While she and Bailey are preparing to testify, their accused assailant's sister asks Sarah for mercy. Though Bailey seeks a restraining order to keep Albert Terry's family away, Sarah begins to question whether she could condemn him to prison. As Paul suggests that he and Kirsten adopt an underprivileged child, Claudia sets out to get Cody back in the band. As Griffin finds Charlie skeptical that Ned is abusing Julia, Kirsten and Paul get word of a child that could be theirs right away.
As Kirsten seriously questions her future with Paul, Charlie's efforts to encourage her not to give up only rekindle memories about their own failed attempt at marriage. And upon learning that Sarah has been in touch with Albert following his release from jail, Bailey is stunned to discover that she's offered her help. Meanwhile, when Justin returns home for his parent's wedding anniversary, Griffin tries warning him about Julia's abusive relationship with Ned.
Though Charlie and Bailey can't believe Ned is abusing her, they reluctantly confront Julia, who claims that Griffin's accusations could not be farther from the truth. And when details about Daphne's background reveal that her mom abandoned her at a very early age, Charlie wants to give their relationship another try. Meanwhile, as Bailey is asked to be a partner in a chain of new restaurants, Claudia takes offense when Cody invites some friends along on their date.
With Charlie in Los Angeles, Owen's teacher calls Bailey about his problems at school. And when Ms. Lo suggests Owen needs extra help to overcome a learning disability, Bailey offers to be a classroom volunteer without consulting Charlie first. While Ned suggests breaking up, Julia persuades him to join her in counseling to address his physically abusive behavior. But, as Julia refuses to join a battered woman's group, Dr. Kessel's pointed questions begin to strike a raw nerve with Ned.
As he and Charlie continue to battle over custody of Owen, Bailey goes behind his brother's back to get advice from their child welfare caseworker. Following Claudia's repeated efforts to contact her at school, Julia returns home and offers to help with their dispute. However, as both Charlie and Bailey insist that Julia not get involved, Sarah struggles with her mother's decision to remarry.
As Bailey seeks legal advice on how to gain custody of Owen, Claudia tells Griffin that his suspicions about Ned's abuse were right all along. And though Griffin is reluctant to get involved, Claudia enlists him and Maggie in a plan to talk some sense into Julia. As Griffin's efforts to speak with Julia are set back when their car runs out of gas, Ned turns to Maggie for answers. And while Maggie adamantly refuses to tell him anything, Julia stands fast in ignoring Griffin's warnings.
As the arrival of a subpoena reveals that Bailey is suing for custody of Owen, Kirsten starts looking for a place of her own to live, unaware that Griffin is interested in the same apartment. Warned against doing anything that would tear the family apart, Bailey suggests they avoid going to court by hiring a judge to hear their case privately. Meanwhile, Julia balks when Ned attempts to use his disabled brother as a way of luring her back.
As Bailey gets help moving the last of Owen's things into his loft, he and the rest of the family prepare to celebrate Claudia's sixteenth birthday. However, as everyone hurries to get to a party at Bailey's on time, a power failure strikes the entire city. In the ensuing blackout, a traffic jam leaves Charlie with a crying baby while Julia and Griffin find themselves stuck inside the elevator that was taking them up to the party.
As Griffin reluctantly agrees to a date with Julia after spending the night with her, Bailey is pressured to acknowledge their own mutual attraction when his new restaurant manager, Lauren, accuses him of avoiding her. And while Claudia makes it clear that Kirsten is interested in giving their romance another try, Charlie doesn't know what to make of the news that she's thinking about leaving the country.
Upon refusing to accept Lauren's resignation, Bailey insists they can put their mutual attraction behind them and continue working together at the restaurant. And once Charlie's rekindled romance with Kirsten is finally out in the open, he laments his lack of privacy. Meanwhile, as Julia stays up all night to finish a story she wants a prominent young writer to read, Sarah helps Claudia get information about birth control.
While Julia turns her focus towards Perry as Claudia struggles to avoid sex with Cody, Charlie is determined to find a new apartment. Yet, fearing that he'll slip away once again, Kirsten turns down an offer to finish her doctoral dissertation so she can stay in San Francisco. Meanwhile, as he prepares to host an important dinner that could mean lots of new business, Bailey asks Sarah to set aside participating in a student demonstration in order to help him out.
As they are both hard at work on applications for a prestigious college scholarship, Julia asks for Perry's advice while Sarah decides to find some quiet time to think about her essay. While Perry uses the opportunity to ask about Julia's intentions, Sarah seeks refuge at a campground where she can think. Meanwhile, after Bailey suggests that Cody is unduly influencing Claudia, Daphne arrives unexpectedly at the Salinger home.
As Bailey continues to worry about Claudia, Kirsten suggests that she may be about to move on in her life without Charlie. So, after Bailey decides to put some stability back into his own chaotic life by asking Sarah to marry him, Charlie reveals that he's also going to propose. Meanwhile, as Claudia tries changing her image to impress Cody and his friends, Julia and Sarah are both hard at work trying to salvage what's left of the school year.