Claudia is released from the hospital. When she comes home, she tries to kill herself by taking an overdose with pills, but she's saved by Blake's friend, dr. Nick Toscanni. It turns out that Nick's secret plan is to get back at Blake for something that happened in the past. Fallon and Jeff decides they want to have a baby. Claudia moves into the Carrington mansion. Blake tries to get Alexis out of his property. Alexis tells Steven that he is Blake's only child and that Fallon's father is another man.

Elena confesses to Amanda that nothing happened in the bedroom with Prince Michael. Sammy Jo fits her roommate Rita with a blonde wig and has her practice duplicating Krystle's voice. Fallon has chosen a new name and heads for Denver. Dex is kidnapped by Yuri and his gang as Amanda and Michael recite their wedding vows. Dex breaks free from his captors and heads for the chapel, where terrorists have opened fire on the entire wedding party.

Blake's trial continues. Both Joseph, Claudia and Krystle have to testify. When Claudia testifies, she has to tell that she had an affair with Steven, and then Matthew finds out about it. He makes rebellion in the court room, attacks Blake and has to go to jail. Claudia packs her stuff, runs away, and takes Lindsay with her. On the way, they collide and get serious injuries. In the final scene, Jake Dunham calls in a new witness, and in walks a mysterious woman. It turns out to be Alexis Morrell Carrington - Blake's first wife.

Blake tells Alexis that Charles Matthews knew about Fallon's childhood nightmare. Matthews also knew that Blake's father, Tom Carrington, covered up the incident. Alexis blackmails Blake for half of the plundered Nazi treasure. Jeff and Dex enlist Zorelli's help to dig up information on Captain Handler. Fallon dreams of the lullaby she heard Krystina sing. She remembers the lullaby came from a music box that was part of the treasure. Fallon asks Krystina to show her where she found the music box. Alexis offers to give up her claim for half of the treasure, sparing Blake public scorn, if Sable withdraws her lawsuit against Colbyco. Sable agrees. Krystina leads Fallon into a secret tunnel passage and to the hidden treasure, unaware that Dennis Grimes has followed them. Handler meets with the mastermind behind the scheme to steal the treasure, but his identity is never revealed. Grimes takes Fallon and Krystina hostage inside the tunnel. Handler and several police officers raid Blake's ma

Krystle regains consciousness and finds herself locked in the attic at Delta Rho Farms while Rita is impersonating her at the mansion. Dex is caught and tortured in Moldavia. A furious Blake learns Adam lied to him by canceling a business trip to marry Claudia. Blakecuts Adam out of his will. Claudia is upset to find Michael has been appointed chairman of La Mirage. The Colby family attends Blake's party to announce the formation of the Carrington-Colby pipeline. Blake, however, continues to question Jason's integrity. One-time lovers Dominique and Garrett Boydston, Jason's chief counsel, are reunited. From his bedroom window, Jeff spots Miles Colby arriving with Fallon.

When Blake learns Steven's attorney Chris has moved in with his son, he vows to fight for custody of little Danny. Morgan Hess, Alexis' private investigator asks his employer for a large sum of money to payoff a gambling debt; when Alexis refuses, Hess leaves with a threat. Kirby realizes her baby was fathered by Adam. Fallon meets with Adam's former physician, Dr. Edwards, who tells her of Adam's temper and underlines his brilliance: He once won a case by proving a plant worker was poisoned and driven insane by chemical fumes. Realizing the connection to Jeff's illness, Fallon asks the hospital to investigate. Alexis tricks Krystle into meeting her at Steven's cabin, where she offers her $1 million to leave Blake. Outraged, Krystle rises to leave, but the door will not open--someone has bolted it shut from the outside, and smoke is pouring in from under the door........

Convinced that someone is trying to frame him for Chisolm's murder, Blake turns to Charles Matthews for answers to his father's mysterious past. Matthews tells Blake a dark secret that leaves Blake in a daze. Zorelli finds a bug in his apartment, which Dennis Grimes, and Captain Handler planted. Jeff finds out that Adam was responsible for the story that accused him and Monica of being involved in an incestuous affair. Jeff confronts Adam and a serious brawl ensues. Walking in on the fight, while Sable and Monica watch, helplessly, Alexis uses the moment to announce that Jason Colby is not Monica's father. Outraged by Alexis' betrayal, Sable hurls herself atop of Alexis, pummeling her wildly. Adam tells Alexis that the painting Grimes gave her is a Fredrick Stahl. Putting the connection together, Alexis realizes Blake is hiding a treasure plundered by the Nazis. Sammy Jo tells Tanner that she loves him, leaving him torn between his vows and his love for her. Sable tells Dex that he is

Blake is arrested for the murder of Ted, and a big trial comes up. The prosecutor is Jake Dunham, an old friend of Claudia and Matthew, who does not like Blake. Krystle hears about the trial and decides to come back to Blake to be with him, and then solve their problems later. Fallon is afraid and to help her father, and she lies in court. Steven tells the truth about what really happened, though.

Cecil leaves his estate and ColbyCo to Jeff and Alexis. He also reveals his ""Rhinewood-game"" in his will. Blake suspects Alexis of being a part of it. Adam finds Alexis and shows her the silver rattle he had when he was kidnapped. Alexis believes him.

On the witness stand Steven testifies he saw Alexis push Mark to his death. Furious, hurt, and still claiming her innocence, Alexis disowns Steven. Dominique offers Blake $25 million for control of his company. Stunned, Blake offers her 40% of Denver-Carrington for $30 million. Jeff sees other women in an attempt to forget Fallon, but remains obsessed with his ex-wife. Dismissing her attorneys and deciding to represent herself, Alexis takes the stand and testifies she was not wearing the cape that incriminated her. The prosecution, however, proves it had been delivered to her and was found stuffed in a trash bin behind her building. The verdict is at last delivered: Alexis is found guilty.

As Blake becomes increasingly disturbed by Krystle's sexual resistance, Joel tells Rita that she has to sleep with Blake. In the meantime, Joel takes the real Krystle out for a night-on-the-town, where they are seen by an astonished Alexis and Dex. Krystle's signals for help are ignored. With Alexis' financial backing, Galen prepares to send Michael to New York to hire mercenaries for their cause. Determined to reclaim the oil well, Claudia attempts to win over Steven, believing he can persuade Blake to relinquish control. Adam Carrington offers Bart Fallmont a handsome bribe to prevent a preliminary injunction against the family enterprise.

Afraid that something may have happened to Dex, Alexis demands to be let into his room, only to find Amanda and Dex in bed together. Horror stricken, she vows to disown Amanda and storms from the room. Krystle confronts Alexis for initiating false rumors to a journalist regarding her captivity. Krystle overturns a table laden with food into a seething Alexis' lap. Galen assures Dex that he has lost Alexis forever and now she will be his queen. Alexis leaves for St. Thomas to get a divorce from Dex. Adam is dismayed to learn of Blake's plans to put Steven on the board of directors. While attending a party, Adam sees Bart Fallmont and Steven together and misinterprets it to mean something more. He immediately sets a conspiracy into motion to gather incriminating evidence against the senator. Garrett meets Jackie and after learning her age and the tragic story of having lost her father soon after her birth, Garrett suspects she might be his daughter. Back from St. Thomas, Alexis walks in

With his reputation destroyed after the court battle with Ben, Jim Ellison, the influential Eastern money broker, refuses to loan Blake the one billion dollars needed to rebuild Denver-Carrington. Unexpectedly, Middle Eastern financial magnate Farouk Ahrned offers to loan Blake the money for a staggering fee. Desperate for the capital, Blake accepts, not knowing that Alexis is his actual creditor. Through furtive investigations, Caress discovers that Emily Fallmont was with Ben the night of Ellen Carrington's death. She quickly relates this information to Blake, and leaves with him her expose, ""Sister Dearest"" as additional ammunition against Alexis. Blake confronts Emily, who breaks down and confesses her guilt. Seeing her torment, Blake promises to fight Ben without benefit of Emily's testimony. Struggling on her own, Jackie reconsiders her rash action of running away. Returning home, Jackie is shocked to learn that Garrett is her real father. Amanda becomes more and more despondent

Blake is shocked when newspaper headlines announce Ben's acquisition of the South China Sea leases. Sure of Ben and Alexis' collusion, Blake greets the co-conspirators with copies of ""Sister Dearest,"" which he vengefully hands out to the hungry press. Claudia informs Blake that while ill, he gave Adam power of attorney to turn the Lankershim One oil well over to her. Disturbed that the well is nearly dry, Claudia becomes lost in a dreamlike past. Locking herself into a candlelit room, she accidentally sets the room ablaze. Sammy Jo and Amanda fight for Clay's affections during Dominique's engagement party. When a vicious struggle lands both women in the pool, Amanda holds a helpless Sammy Jo under water. Dominique's happiness is shattered when she learns that Garrett was never married before. After manipulating Ben into giving her one half of the leases, Alexis plots her ultimate revenge. Calling in her one billion dollar loan, Alexis renders a stunned Blake financially impotent. When

Krystle is haunted by an eerie sense of foreboding following the appearance of mysterious shadows beneath her window. A blood test to determine the identity of Clay's real father proves inconclusive, causing Clay and Ben's decision to leave Denver. Steven's decision to leave Denver results in further pain and confusion for those that love him the most. Adam is awed and overjoyed by Blake and Alexis' demonstration of love by officially adopting him. Swept away by the romance and splendor of Adam and Dana's wedding, Dominique accepts Nick's proposal of marriage. Struggling with her loneliness following the wedding, Alexis flees in a state of emotional duress. Her car plunges off a bridge and falls into the river. The joyous atmosphere of the wedding is shattered as mysterious men besiege the mansion and round up the Carrington family. Krystle's ominous suspicions are confirmed when she recognizes one of the men as Matthew Blaisdel, who has returned for her

Krystle agrees to the operation only after Blake reluctantly signs her divorce papers and living will, to be enacted if the surgery is not a success. Virginia tells Krystle of her troubled youth after their mother left her. Krystle invites Sable to dinner and their friendship continues to grow. Fallon is haunted by a recurring dream of Roger Grimes. Dex hires a Vietnam buddy, Painter, to investigate Colbyco's controller. Krystle recognizes one of the caterers at her dinner party, Gibson, as the same man she sees coming out of the lake in her haunting nightmare. Fearing Krystle will put the puzzle together, Sable tells Gibson to discontinue his dives into the lake. Those are the same dives that originally uncovered the body of Roger Grimes. Thinking he has discovered an underwater passageway, Gibson is hesitant to abandon his search. Virginia reacts very strangely when she is introduced to Dex. Following the reaffirmation of their wedding vows, Blake is forced to cancel his and Krystle'

The butler, Joseph Aynders, shows Krystle that he doesn't like her, and he means she doesn't belong in the Carrington family. Krystle understands that Blake is the one who bought the necklace, to show her that he had found out. They have a little argument about this, and Krystle decides that life with Blake is impossible and leaves him. Steven tells Claudia he spent the night with Ted, but now he wants to quit his relationship with both of them. Steven and Ted are just saying good-bye and hugging each other when Blake discovers it. He gets furious, because ""the gay"" is now standing there in his house with his arms on his son. He attacks Ted and there's a fight. Ted trips, hits his head, and dies.

Michael goes to Denver to find out who he is. Alexis and Cecil plan a wedding in the hospital. Claudia disappears and Blake suspects her of kidnapping the baby. There's an exiting drama on the roof of a tall building. Claudia has the baby in her arms and refuses to give her away, thinking it's Lindsay. She finally throws the baby over the edge, but it turns out it was only a doll.

Alexis and Adam get good along in their mother-son relationship, and Alexis gives Adam a job in ColbyCo. Blake starts believing Adam is his real son. Fallon and Adam keep flirting with each other, not knowing they are siblings. Adam has dinner with Krystle and Blake, but it ends with a conflict. Alexis gets a hold of Krystle's first husband Mark.

Back in Denver, Blake continues his frantic search for Steven with the help of psychic Jason Dehner. Blake refuses to believe his son is dead, and Krystle is worried about his erratic behavior. Seeing how much she loves Blake, Fallon reconciles with Krystle. Blake refuses to attend the memorial service Alexis has arranged for their son. Alexis seduces Mark. Sammy Jo, now preferring to be called Samantha, appears at the Carrington household with a baby. The child is Steven's son.

Excitement brews in the Carrington household as-preparations are made for Steven's return. It is an emotional moment as Alexis, Fallon and Krystle embrace Steven, who is introduced to his brother Adam and son Danny. Jeff and Kirby are married in Reno; plans are underway to finalize the Denver-Carrington/Colbyco merger. Fallon and Mark continue their affair; Alexis confesses to Steven that she paid Sammy Jo to get out of Denver, and that she suspects Blake 'bought' little Danny from the girl. Steven heads to New York to find his wife.

Blake visits Dominique at La Mirage to discuss her recent revelation. She tells Blake that her mother was a long-time mistress of his father and has evidence to prove it. At Alexis' trial, a neighbor offers powerful evidence that incriminates Alexis. Along with Mark, she saw a woman on the terrace wearing a cape that has been positively identified as Alexis. Blake is called to testify and states that Alexis would indeed commit a violent act if sufficiently provoked. In a dramatic courtroom scene, Steven is called to the witness stand and he must tell what he knows or protect his mother.

As Alexis and Amanda emerge from an exclusive bridal salon, a car suddenly screeches to a halt and Amanda is pulled inside. A high-speed chase ensues. As Dex forces the kidnapper's car onto the sidewalk, Amanda breaks free. It is clear that Yuri, the Prince's chief bodyguard, is behind the kidnap plot. Steven requests Luke accompany him to Amanda's wedding. Adam and Claudia profess their love. Dex receives a telegram bearing tragic news. At a Los Angeles police station, a young woman appears who bears a striking resemblance to Fallon.

Alexis learns that Galen is alive and can be rescued if $10 million is smuggled into the Moldavian underground. Tired of competing with the king's ghost, Dex promises to help Alexis complete the mission. Joel and Sammy Jo plan to chloroform Krystle at the Charity Ball and have Rita take her place. Sammy Jo has Krystle's dressmaker duplicate the gown she'll wear that evening. Jeff, now Jason Colby's partner, plans to move to California, where he believes he'll find Fallon. Michael continues to shut Amanda out of his life. In San Francisco, Adam and Claudia are married. Krystle walks in on Rita as she's practicing her imitation. Joel knocks Krystle unconscious and announces that Rita is now the new Mrs. Blake Carrington.

Speaking at her own prearranged press conference, Alexis brashly announces a masquerade party fund-raiser at the Carrington mansion. Upon returning from Hong Kong, Blake reluctantly agrees to host the event in hopes of persuading ex-senator Buck Fallmont to reevaluate his stand on the pipeline. Intercepting a call meant for Caress, Alexis learns of her sister's spiteful plan to write a book on her tumultuous life. Garrett confronts Dominique with the fact that Jackie's father is listed as ""unknown"" on her birth certificate. Dominique denies Garrett's assertions that Jackie may be his daughter. At the masquerade ball, Bart Fallmont shows Steven the newspaper headline running in the next morning's edition, which claims that Bart had a homosexual lover. Steven immediately suspects Adam's treachery and a fight ensues. Alexis then sets her plan for Blake's demise into motion when Ben removes his costume and reveals himself as Blake's brother.