Perri rescues someone from the surf, only to discover that he's an adrenaline junkie who's risked both their lives to seek attention. She's hailed as a hero but is so traumatized that she vows never to rescue anyone again. It's Matt who gives her the confidence to go back on patrol. He teaches her some self-defense techniques so she won't have to risk her own life to save someone else's.

Fly's having strangely romantic dreams about Heath, and she's desperate not to give away how she feels. On the eve of her birthday, she complains to Anna about missing her friends back home—and about being treated like a little kid. Anna organizes a party to cheer her up, making the others take Fly on a surfing trip so it can be a surprise. After a comedy of errors trying to avoid Heath, Fly ends up having to own up to her feelings.

It's the start of a new year at Solar Blue Surf Academy and Fly is back to help out Simmo whilst she completes school. Six new students will be accepted, with the help of Bec, Heath and Fly.

Bec is invited to a big wave competition in Tahiti, but she's nervous about surfing heavy waves and, at the same time, trying to get Edge out of her head. The other girls suspect Bec has been chosen because she knows the competition organizers and give her the cold shoulder. When Edge points this out during a massive fight with Bec, she takes a risk surfing in huge swell and ends up in the hospital.

Perri's parents have cut off her credit card. When a rival sponsor offers her a modeling contract, she thinks about leaving Solar Blue Academy. The modeling contract falls through at the last minute, so Perri's back to square one.

Fly tries teaching basic fitness techniques to the team, but they are not participating to the best of their ability. Simmo is angry that the kids aren't following Fly's advice, so he organises a surfing competition that sets Fly against this year's entire Solar Blue surfing team. Meanwhile, Heath goes for a job position as the junior photographer for Stax Magazine.

Sparks fly when tension in the house begins to explode. Used to living as an only child, Mike starts to get angry at the lack of space in the house. When he deliberately destroys Corey's huge house of cards, a huge fight breaks out between Corey and Mike. So Simmo organises a bonding weekend at an outdoor adventure park to bring the group back together. Mike and Corey are teamed up, and all hell breaks loose.

Annette organises a beauty contest to raise money to get better gym equipment. The Solar Blue girls think the idea of beauty contest is sexist, and will not participate in the fundraising. But Corey drops a bombshell when he reveals that he will be taking part in the contest. Will this beauty contest threaten his newly-found relationship with Rachel?

Edge alienates the boys with his 'win at all costs' attitude at a triathlon event by not helping Matt when he falls off his bike. To teach him a lesson, Heath doesn't bother to pick up a race marker when it falls over, and Edge takes the wrong path, getting completely lost in the national park.

It's the first official day of training and because everyone performs so well, Simmo gives them the rest of the day off. Amy's idea for a picnic is the perfect oppurtunity for everyone to get to know each other.

Eric scores big money after being offered the chance to be on the front cover of Stax Magazine. Eric uses the money to buy himself a new surfboard. But he loses the board while testing it out, and he is unsure how he is going to repay the shop. To make matters worse, he is now broke and he is unsure how to tell Amy that he likes her.

It's well into the year at Solar Blue and Eric has mastered the art of slacking off. After a stupid stunt with a training helmet Simmo decides it's high time that he and Eric have a chat. When Amy overhears a conversation between Simmo and Eric she believes Eric is on the way out of Solar Blue.

Fly is homesick and accidentally runs up a huge bill on Anna's mobile. She secretly starts work at a carwash to try and pay it off but breaks the machinery, ending up deeper in debt. She's about to quit when the team comes to her rescue.

The Solar Blue team are off to their first day of school. After just one day, the three girls already have dates, but they soon discover that their boyfriends have other things on their mind. Meanwhile, Heath devises a system for working around the house, but he gets stressed when nobody likes his new idea.

Simmo introduces the score board to the team. Heath devises a new plan for the household chores. Corey and Rachel have an argument about science versus nature principal. Corey believes that science can tell him when and where to take the perfect wave. Rachel believes that people should just go with their own instict. Corey plans his perfect wave for an upcoming competition using his science knowledge.

Perri's diabetes is revealed when she collapses into a coma. Deb's forced to tell Solar Blue, who are nervous about sponsoring a surfer with a potentially life-threatening condition. Matt campaigns on Perri's behalf, and she's allowed to stay. The only obstacle left—convincing Perri that diabetes won't stop her from being a champion.

Perri's feelings for Edge come to a head when she's spooked by a tramp hiding out in the board shed. When Edge accompanies her back to the shed in search of a lost ring, she kisses him. Edge is quite confused but wants to forget it; after all, he's keen on Bec. Consumed with guilt, Perri tries to make things 'normal' with Edge, and that's when Matt and Bec find out. The team's training regime is stepped up a notch when they are forced by Deb to train fully clothed in the pool to build up their strength: they are not happy!

Heath persuades Anna to sneak down the coast with him for a kiteboarding competition. Anna wins the competition and is faced with a dilemma. She's also won entry into the junior team—should she give up surfing and return to her first love?

After suffering a back injury, Brooke fears that she may not be physically strong enough to win the Solar Blue sponsorship and compete in the pro-circuit. Could this mean that Brooke may have to drop out?

Joe and Anna face off in a dangerous surf-off to determine which one of them deserves Anna's place in the academy. Bec decides to make the competition more fair to Anna by giving her advice but Joe sees it as a betrayal.

Heath's failing at school and copies Matt's project in desperation. When they both lose school marks and surfing points for cheating, Matt feels betrayed. Matt's been mystified by some rare local fish, but Heath discovers their secret. He thinks outside the square, making a project about the fish that wins back Matt's friendship and their school marks.

Bec's friendship with her brother Joe has suffered since she made it into the Academy. When she catches him stealing surfboards, the team pressures her to call the police, but she knows this could destroy their relationship.

A shark scare brings everyone's greatest fear to the surface. Matt's seemingly unshakeable until his father, Ewan, unexpectedly arrives. Matt has his own plans for the future, but his fear of disloyalty to his father affects his surfing.

Matt and Edge are vying for the top position on the Academy scoreboard, and their friendly competition quickly gets out of control. Egged on by Heath and the arrival of a pretty new girl, they challenge each other to a dangerous surfing stunt. When the stunt almost kills Bec's little brother Ben, Matt and Edge realize there's a difference between acceptable risk and irresponsible behavior.

Heath is pressured by a ruthless surf magazine editor to secretly take 'behind the scenes' photos of the Academy couples and their romantic antics. Deb's also keeping close watch on the starry-eyed pairs, worried there's too much fooling around and not enough training. Simmo's solution is to throw extra training at the team in the vain hope they'll be too exhausted for a social life.