The big, wealthy oil tycoon Blake Carrington and his former secretary, Krystle Grant Jennings are getting married. Krystle's ex-boyfriend, Matthew Blaisdel, who's been working as a geologist on one of Blake's oil rigs in the Mideast for a year and a half

Matthew gets a little visit from an old acquaintance, Walter Lankershim. Walter asks for money, because he's in trouble. He's lent money from Blake to drill for oil, but he haven't made any strikes. Matthew refuses to give him any money. Matthew goes to visit his present wife, Claudia, who's been in a mental institution for 18 months, but he learns that she's much better, and she's been released. Matthew, Claudia and their daughter, Lindsay, decides to start over again as a family. Blake and Krystle get to talk about their disagreements, and starts planning a big wedding. There's an accident on Walter's oil rig and he finds out that somebody has been sabotaging. He's convinced that Carrington has something to do with this.

Blake and Krystle have to break off their honeymoon, because Blake's in a bit of a crisis at work, and he has to go home to do business. Walter gets in trouble with the workers on his rig, but he gets it all straightened out, and both Matthew and Steven get a job there. Blake doesn't like this. Krystle has problems getting along as a wealthy woman, with all the servants and the money. Matthew and Claudia fight alot, they both think it's difficult to start this new life. Cecil and Fallon have negotiations of their own. Cecil is going to help Blake out of his problems, if Fallon marries Jeff.

Blake apologizes to Walter and Matthew about their fight at the wedding and asks Matthew to come back to his old job. He also invites them to a dinner party at the mansion. During the dinner, many things happen; Steven and Claudia meet and get along really well, Matthew has a long talk with Krystle and tells her that he's still in love with her, and Cecil and Fallon start realizing their plans. Cecil offers to help Blake and Fallon starts hitting on Jeff.

Cecil helps Blake with his money problems. Jeff and Fallon get married. Blake's driver, Michael Culhane, who's been sleeping with Fallon, is a bit jealous, because she won't take him anymore. Blake hires him to do undercover work for Denver-Carrington, and he starts flirting with Cecil's secretary. Blake warns him about being unloyal. Steven gets a visit from his gay friend, Ted Dinard, from New York.

Michael still tries to win back Fallon and tells Blake about Cecil and Fallon's agreement. Blake and Fallon argues about this. Steven is taunted on the job for being gay. Lindsay has a boy over to study, he tries to put the moves on her and she gets upset and runs off. Blake wants to have a child with Krystle. Matthew invites Steven to a dinner party at his house. In the end Steven and Claudia secretly start kissing.

Walter takes Steven to a bordello to try to ""straighten him out"". Something goes wrong at Matthew and Walter's rig, Steven is blamed for sabotaging, and though he's innocent, he looses his job. Blake's plan now is to take Walter and Matthew's rig when they're in trouble. Krystle doesn't like Blake's methods in his work. She pawns an emerald necklace and loans Matthew the money to help him. She makes a false copy so Blake won't understand it's gone. In the end, Matthew and Krystle kiss, but Krystle breaks it off and leaves.

Matthew finds the guy who really sabotaged the rig. Steven is offered his job back, but turns it down. Claudia learns about Matthew's relationship with Krystle. Lindsay is upset, thinking that her parents HAD to get married just because of her when she was born. Steven's boyfriend Ted tries to contact him, but Fallon does everything she can to stop it and keep them apart. Blake finds out that Krystle is on birth control pills and assumes she's not interested in having a baby. He gets both mad and drunk and forces Krystle to a rough sexual intercourse.

Blake apologizes to Krystle about his behavior, and she forgives him. Michael has found out about Krystle's pawning and tells it to Fallon. Matthew and Walter finally strike oil. Claudia goes out with a guy she meets and almost has an affair with him. She manages to pull out, but later she has an affair with Steven. Lindsay starts finding out about it.

Jeff comes home after being in the Middle East, but he and Fallon have lots of arguments. Steven decides to get some more education and to start working for Blake, and he moves to his own apartment. Blake finds out about Michael's relationship with Fallon and hires some people to beat him up. Lindsay finds out everything about her mother's affair, which is still going on.

Blake learns about Krystle's ""pawning"". He doesn't tell her, but he starts frightening her with hints. Jeff now knows that his marriage to Fallon is only a part of a deal, and he does everything to embarrass his wife. Especially during a birthday party Blake throws for Cecil, when he yells out to everybody what he thinks of them. Ted still tries to get into Steven's life again. Matthew manages to pay the money back to Krystle, and she wants to buy her necklace back, but the pawner has already sold it.

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.

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.

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.

Following a serious traffic accident, Fallon mysteriously vanishes. Dex and Steven bail Alexis out of jail. Sammy Jo attempts to seduce Adam. Alexis flatters Adam by suggesting he work with her defense attorney, Warren Ballard. Dominique's husband Brady arrives at La Mirage and finds his wife suddenly interested in staying in Denver. Steven accuses his mother of killing Mark Jennings and ruining Blake's business. Despite her pleas, Steven tells his father everything. Steven orders Sammy Jo from the mansion. She counters by promising she'll sue for custody of Danny. After duping Adam into letting Danny ride along with her to the airport, Sammy Jo dashes off, kidnapping her son.

Steven accuses Adam of conspiring with Sammy Jo to kidnap Danny. Blake arranges to take out a mortgage on the mansion. He little suspects Alexis has signed the note and will become the owner if he defaults. A cross-country search for Fallon has developed few leads. Warren Ballard and Adam prepare Alexis' defense. Dominique Deveraux makes her singing debut at La Mirage, with Blake and Krystle in attendance. Krystle quickly senses Dominique's hostility toward Blake. Brady declines the Carrington's hospitality as well. Jeff finds a truck driver who gave Fallon a lift to Portland, Oregon, the night of the accident.

To secure financing for his bankrupt company, Blake arranges to see Billy Waite, a notoriously underhanded oil man. Jeff continues his search for Fallon. Impatient with the progress her lawyer is making on her defense, Alexis fires Warren Ballard and retains Adam. Alexis visits Billy Waite in South America under the guise of concern about Blake's misfortunes. As she prepares to leave, the police arrive. She is arrested for fleeing to avoid prosecution and led away by the police. At an isolated religious retreat, Jeff learns Fallon is dead and that she died along with Peter DeVilbis.

In Seattle, Jeff and Blake learn the woman who died in the plane crash with Peter DeVilbis cannot be positively identified, but the ring she was wearing is indeed Fallon's wedding band. Jeff creates a scene at Fallon's funeral. Steven meets Sammy Jo in Los Angeles, where she demands payment of $3O,OOO per month for Danny's return. After Claudia points out his behavior only isolates him from the family, Adam is moved to action. Adam breaks into Sammy Jo's motel room and retrieves little Danny.

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.

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.

Adam and Dex vow to prove Alexis' innocence and begin a determined campaign. The woman who testified she had seen Alexis on the terrace with Mark had hosted a party that evening and snapped photographs. The negatives reveal it was Neal McVane who had framed Alexis for Mark's murder. Alexis is freed. Denver-Carrington is back in business. Alexis vows revenge on Dominique when she learns of her new partnership with Blake. Brady is stunned to learn of Dominique's true relationship with Blake. Upon returning home, Alexis receives a visit from a beautiful young woman named Amanda. She is Alexis' daughter.

Amanda insists Alexis acknowledge their relationship and begs her to reveal her father's identity. Alexis tells her it was simply an anonymous ski instructor in Gstaad. Steven and Alexis reconcile and he rejoins Colbyco, where Luke Fuller, an attractive young man, has just been hired as public relations director. Claudia enters Steven's office to find Luke straightening her husband's tie. Amanda goes public with a front page story announcing she is Alexis' illegitimate daughter. Jeff meets an attractive young widow, Nicole, whose late husband was Peter DeVilbis.

Amanda insists Alexis acknowledge their relationship and begs her to reveal her father's identity. Alexis tells her it was simply an anonymous ski instructor in Gstaad. Steven and Alexis reconcile and he rejoins Colbyco, where Luke Fuller, an attractive young man, has just been hired as public relations director. Claudia enters Steven's office to find Luke straightening her husband's tie. Amanda goes public with a front page story announcing she is Alexis' illegitimate daughter. Jeff meets an attractive young widow, Nicole, whose late husband was Peter DeVilbis.

Krystle goes into premature labor and delivers a baby girl, who suffers from respiratory problems. She names the child Kristina after a friend who once saved her life. Claudia is uneasy when Steven accompanies Luke on a business trip. After confiding in Dean Caldwell, he moves to hug her, and the two are soon in a passionate embrace. Amanda overhears Dex tell Alexis to stop hiding the identity of Amanda's father. Jeff finds a photo of Peter DeVilbis in Nikki's hotel room.

Upon learning that he may be Amanda's father, Blake resolves to ask Amanda to take a blood test. Nicole tells Jeff there's a chance Peter DeVilbis may have been with another woman at the time of the crash. Under the pretense of a family outing, Alexis arranges to send Dex and Amanda to a ski lodge. With the tension growing between them, Amanda and Dex begin to fight. Their fury, however, soon turns to passion. Alexis finally arrives and announces the three are bound for London, where she and Dex will marry.