The kids are back to school in a new building. Erica had her first ""serious"" boyfriend, and think she may be pregnant after a night of unsafe sex with her Jason. Spike's daughter, Emma goes to daycare in the same building as Degrassi high. The Degrassi gang are both fearful of initiation, and they do not know what to expect out of the older bullys like Dwayne, Tabi, and Nick. Joey and Caitlin are still going out but his priorities are the promotion of his band, The Zit Remedy, (which this season will have a new name called The Zits)

Erica decides to keep the pregnancy a secret (the only person she tells is her twin sister, Heather). She also decides to have an abortion. Heather, disapproves of this, but accompanies her to the abortion clinic anyways.Also Alexa dislikes her boyfriends(Simon) new modeling job.

Kathleen's dreams are coming true. Scott is the perfect boyfriend - considerate, affectionate, even gives her flowers. She can forgive him if he's kind of hot tempered - he's got a lot of troubles at home, and really but she dosen't deserve it when he gets upset with her because she was talking to Luke and beats her up. Liz encourages Spike to go out with a boy for the first time since Emma was born, and she's so nervous she almost blows it.

Diana is determined to grow up, but her older brother, left with the task of bringing her up after their father died, is so old-fashioned. And Yick, the object of her affections, is going to be at Melanie's party. How will Diana's brother ever know she went? Joey, Snake and Wheels decide it's time they expanded their horizons a little and attend a strip show. But, as always with The Zits, things don't go quite the way they were planned.

Caitlin and Claude want to do something to protest against a factory involved in nuclear missiles. The peace group they belong to advises them to cool it, but they can't just stand by and let it go on.Scott has been harrassing Kathleen for a while and she gets sick of it and presses charges when he beats her up on her way home from school.

Joey is diagnosed with a learning disability. He contemplates dropping out of high school, but changes his mind after talking to Caitlin. Caitlin tells him to stop feeling sorry for himself, because he's not the only one with a disability, because she has to deal with having epilepsy.

Elsewhere, everyone cheats on a test. The teacher says since everyone gets an A, that test must not have been hard enough, so it won't count and he'd give everyone a harder test.

Caitlin hears that Ms. Avery has been fired from her job in the school resource centre. When she starts a petition around school, protesting her firing, Mr. Raditch intervenes. He tells Caitlin she was offered a job as a substitute teacher, but turned it down. Caitlin confronts Ms. Avery about this. Ms. Avery explains she wants a classroom of her own with students of her own. They get into an arguement, but later reconcile at Ms. Avery's going away party.

Also Michelle takes too many caffine pills and BLT takes her to the school nurse.

Condom machines have been installed in the school washrooms, and as Lucy records reactions with her video camera, Dwayne finds an interesting new use for the condoms -as water bombs to drop on Joey, Wheels and Snake. Joey, however, is more concerned with raising money to put a down payment on a muscle car, and takes bets that he will walk through the cafeteria - wearing nothing but a hat. B.L.T. has trouble breaking up with Michelle. Dwayne receives a frightening phone call from his summer girlfriend. To be continued...

Joey and Dwayne's enmity has escalated since Joey found out that it was Dwayne who turned him in for walking naked in the cafeteria, and Joey is determined to get Dwayne back. AIDS speakers at Degrassi during Sexual Awareness Week make the illness chillingly personal - especially for Dwayne, who becomes increasingly withdrawn as he awaits the results of his HIV test. Michelle finds out the real reason B.L.T. broke up with her.

Lucy, who's feeling unpopular, is thrilled when good-looking Dale invites her to the dance. The girl's volleyball team, however, is upset that the boys' basketball team is getting preferential treatment. Lucy is all set to fight, until she discovers that Dale is the captain of the boys' team. When Patrick, who has broken up with Spike, invites Liz out, Spike is surprised to find that she's jealous. Alexa tries to make up with Michelle.

Melanie's surprise sleepover for Diana's birthday promises to hold more than one surprise when Kathleen finds some marijuana. Hoping to bring his two best friends together, Yick persuades Luke to invite Arthur to a poker game. Joey decides to join ""the nerds"" for poker - anything to get away from Wheels, who's driving him crazy. Yankou must pull an all-nighter in order to get an assignment done on time.

When Lucy, Heather and Erica hear the rumour that their favourite band, The Savages, is making a rock video at the school, nothing will stop them from sneaking in to see them - not even the fact that Lucy's boyfriend Bronco could get into trouble. Joey and Snake's campaign plans are abruptly changed when they also discover the band is at Degrassi. Caitlin's parents ask her to come home so they can talk.

Snake invites Spike to the graduation formal, but then Michelle - who he'd really rather go with - invites him. What's a guy to do? Tessa is becoming bored with Yankou, and wants to dump him, but she doesn't want to hurt his feelings. What's a girl to do? Amy and Alison are desperate for dates to the formal, but only a senior will do.