Father and son are at odds when Dawson moves forward with a news piece for his mom's Philadelphia station using Mitch's star player, Jack, as his subject matter even though Mitch is vehemently opposed. Meanwhile, Joey and Pacey find themselves in cahoots when they must pay the price for ditching class; Andie jumps to conclusions and panics about the reasons Principal Green wants to meet with her; and Jen goes to great lengths to remove herself as head cheerleader but is shocked at the end results.

Joey's friends and their families work together to make sure that the opening of Potter's Bed & Breakfast is a success and that she and Bessie don't lose everything they have after Pacey surprises them with a visit from a prestigious travel critic. Throughout the weekend, Jen admits her concerns to Grams about getting close to Henry; Jack considers moving back home after hearing Andie's loving plea; and Dawson tries to understand the connection between his parents even after their divorce.

When Joey turns to Pacey for rescuing after she flees Boston halfway through her visit with A.J., the two old friends may finally confront their growing feelings for each other. Meanwhile, to avoid suspension, Pacey becomes a mentor to a young boy and must contend with a little version of himself with a big attitude; and behind Gail's back, Dawson asks Mitch to help with the opening of her new restaurant.

Pacey is happy for his good grades, and decides to sail for celebration. Dawson, Joey and Drue are assigned for a work and Joey can't go with him. Instead, Pacey takes Jen with him. What they didn't know is that a huge storm was coming, and suddenly they have to face it. Andie is having an interview with Drue's mom for college, but her medical records get in her way. Mrs. Valentine worries about Andie's mental stability and denies her the spot. When the storm get bigger, Andie takes control of the situation and guides everybody to rescue Jen and Pacey, who admit to each other their biggest regrets in life. Jen regrets never being in love, despite her feelings for Henry, and Pacey regrets the destruction of his friendship with Dawson. Dawson and Joey go on a small boat to rescue them, and Dawson saves Pacey's life. He apologizes to Dawson for all his attitude over the past months.

Pacey and Dawson finally start hanging out together again when Dawson tells him that he has feelings for his sister, Gretchen. Pacey doesn't like the idea, so when he and Gretchen go on a road trip to her ex boyfriend's house to pick up her truck, Pacey tries to get them back together. However, after being there for awhile, Pacey realizes that the guy he's trying to get back together with Gretchen is not who he thought he was.

Back in Capeside, Joey has her fair share of problems when she gets locked in a storage closet at the Yacht Club with none other than the loathsome sociopath Drue Valentine, which is later revealed that he set the thing up to avoid going to New York to visit his estranged father.

Meanwhile, Dawson observes the feelings growing between Mr. Brooks and Grams and fears that Grams will get hurt when she finds out that Mr. Brooks, like her last husband, is terminally ill.

As Gale's delivery date approaches, the girls throw a baby shower for her...but it's an experience that throws Joey for a loop when she realizes it's possible that she could be pregnant, and Pacey is nowhere to be found. After many false alarms, Gail throws a baby name shower to try and think for a name for the baby, and the baby is born. While Dawson awaits the arrival of his new sibling, Dawson and Gretchen wonder what their future holds when Gretchen considers an out-of-town job... Meanwhile, Jack faces an unexpected situation when he learns that Tobey falls victim to a vicious crime.

Dawson is hit with tragedy after he heads home to Capeside to break the news to his parents that he is dropping out of USC to be with Joey, who is in shock herself after she realizes Pacey has been in Boston for weeks.

Joey and Audrey go to a nightclub to celebrate both Joey's grades and fall break. There, Audrey tries to convince Joey to have some real fun. Charlie is also there and he hits on Joey, who turns him down for what he did to Jen. But Charlie doesn't give up so easily and dares Joey to do something wild. She accepts the dare and goes on the stage to sing with the band. Excited about it, she kisses Charlie. Meanwhile, Pacey sees himself hanging out with Audrey after he joins the ladies at the club to celebrate his new promotion. And Dawson and Jen go back to Capeside, where they have their first fight over what Dawson will do with his life. At the end he decides to move in to Grams's attic in Boston and move on with his life.

Pacey's new boss proposes more professionalism in the workplace and promises to leave behind her attraction towards him, even offering Audrey her job back. Audrey suspects something is going on between them and refuses to return to Civilization. Later, Alex drops by at Pacey's and Audrey walks on them talking about their kiss. She storms out in anger, leaving the future of their relationship unknown while Pacey struggles with the growing attraction he feels for Alex. Meanwhile, Dawson runs into Amy Lloyd, the movie critic, and they end up in bed together. After sex, they talk about movies and she lends him her movie. Joey and Jack focus on studies, and while she has problems concentrating, he has to catch up an entire semester and even goes back to the fraternity house asking for help. Luckily, Eric (the same guy that caused Jack his expulsion) shows up at Grams with the needed notes.