Jake and Jo are forced to submit to AIDS tests after his ex-girlfriend Peri reveals that she is HIV positive. Billy uses an embellished resume to win a job at Escapade Magazine.

One of Billy's co-workers discovers that he lied on his résumé, and reports him to Nancy. Alison takes Billy out to lunch and Michael grows more concerned by his attraction to Kimberly. Matt gets a date with a lawyer, but the man turns out to be an egomaniac.

Jo, Alison and Billy go to Steve's ranch for the weekend. Jake forms a friendship with Palmer and tries to get Amanda to open up about her childhood. Michael convinces Kimberly to stay in LA.

Alison learns that Steve is leaving for Europe in a few days. He gives her a new jeep and confesses his feelings. Alison joins him for a weekend on his ranch, but suddenly dumps him because she wants to reconcile with Billy. Billy's bitterness about Alison clouds his judgment on a writing assignment. Jake forces Palmer to confess to fraud on tape. Palmer convinces Amanda that Jake set him up, so she dumps Jake and plots to evict him. Michael falls out of bed, and Sydney refuses to help him until he apologizes for his past actions. Jo rejects Jake's thinly veiled advances, but Billy and Amanda sleep together.

After Michael shuns her, Sydney tells Jane the truth about her involvement with prostitution and Michael's scheme against Robert. Jane blames herself for Sydney's problems, and throws Michael out. Sydney is acquitted because of an incompetent prosecution team. Jo is angry when Reed approaches Amanda as a potential investor in his charter boat service. Jake confronts Reed about his intentions toward the two women in his life. Billy wins a promotion, but learns that the job requires a move to New York. Matt is annoyed by the bizarre behavior of his new love interest. He learns that the man is a closeted Navy officer.

Kimberly brings Michael home from the hospital. Sydney convinces Matt to visit her in prison, and tells him that Kimberly is setting her up. Sydney's father flies in from Chicago, but enrages his daughter by suggesting she seek a plea bargain. Matt becomes suspicious of Kimberly when he realizes that she is shielding Michael from the truth about their history. Sydney's outburst convinces Mr. Andrews that she is crazy, and he and Jane have her committed to a mental hospital. Alison and Meredith fly to Wisconsin and attempt to file charges against their father, but Meredith bails out when she realizes that the town respects Mr. Parker too much to give their story credence. Alison confronts her father in front of all the prominent townspeople at a barbecue, and pushes him into admitting his guilt. Billy is fired when Nancy learns that he helped D&D get the inside track on the Escapade account, but lands a job writing ad copy for D&D. Jake sleeps with Brittany, unaware that Palmer Woodward