Amanda throws herself a housewarming party and Keith is still lingering in LA. Michael moves in with Kimberly and Jane files for divorce.

Billy remains wary of Alison's relationship with Keith, while Jo fears that Amanda has set her sights on Jake. Michael convinces Kimberly to lie about their affair in court. Sydney returns to L.A., and Michael seeks her friendship.

Keith's actions escalate and Sydney caters to Michael's every whim, despite a warning from Jane. Matt get's a new job.

Alison's actions put her job at risk. Amanda orchestrates a plan that ends in flames, placing Jo and Jake in danger. Sam returns to town for a construction job and has dinner with Jane.

Jake and Jo's relationship is fractured due to the fire and Michael accuses Jane of infidelity. Kimberly breaks down during a court hearing and admits her affair with Michael. Matt comes out to a new friend.

Billy and Alison try to get Jake and Jo back together, while Michael and Jane's divorce is finalized. Katya presents Matt with a proposition.

Jane throws Sydney out, but Amanda leases her an apartment in the building. Alison travels to a ranch to make a presentation to millionaire computer exec and Matt decides to marry Katya. Michael and Sydney get closer.

Amanda's father offers Jake a high-paying job and Sydney prevents Michael from breaking up with her by threatening to expose their affair.

Kimberly catches Michael with Sydney and confides in Jane. Kimberly moves out, while Katya and Nikki have to move in with Matt.

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.

Michael and Kimberly have a disastrous dinner with deadly consequences. Jo gives Alison the cold shoulder, and warns her that she is on the verge of destroying her relationship with Billy.

Alison has to miss Thanksgiving dinner to go to San Francisco for work. The FBI orders Jake to assist them with a sting on Palmer and Jane offers Sydney a holiday truce. Kimberly's mother makes a decision.

Michael learns that Kimberly has died and Sydney gets a new job.

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.

Billy manages to sneak out of Amanda's apartment without detection. Alison asks him for a reconciliation, but he turns her down. Matt promises Nikki a Christmas party. Billy and Jake look for a tree for the courtyard, and end up running into Jo and Alison. Billy tries to fly home for Christmas, but can't get a flight. He plays Santa at Nikki's party. Alison finds him sneaking a present into her stocking during the night. They apologize and renew their relationship. A temporary nurse prompts Michael to reflect on his behavior. He apologizes to Jane and Robert. Sydney goes to confession and gives up hooking. Nikki returns to Russia.

Billy tells Amanda that he and Alison are back together. Amanda responds by removing Alison from the Microcomp account because she was romantically involved with the client. Amanda moves forward with her plans to evict Jake, but Jo refuses to testify against him. Amanda relents when she needs Jake's help with a plumbing problem. Palmer confesses his guilt to Amanda and skips town. She goes back to Jake. Jo goes to her ten-year high school reunion and runs into Reed, an old boyfriend who has just been released from prison. He later turns up at her apartment. Michael has a breakthrough at a physical therapy session, and regains the use of his legs. Sydney is busted for prostitution. Michael bails her out and agrees to keep quiet if she helps him break up Jane and Robert.

Alison complains to the brass about Amanda's mistreatment of her. After the FBI shows up with questions about her father's disappearance, Amanda is ordered to take a vacation. She heads to Hawaii with Jake, but returns because she fears that Alison is after her job. She goes to Billy and threatens to expose their one-night stand unless he gets Alison to back off. He refuses to cave in, although Alison ends up apologizing to Amanda anyway. Sydney sets up a hooker with an unknowing Robert during a business trip. Jane receives a videotape of the two together and breaks up with Robert. Reed and Jo sleep together. He later decides to start a charter boat service.

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.

Amanda and Jo invest in Reed's business, and Jake is hired as chief mechanic. Jo displays a lack of trust toward Reed after he leaves a suitcase of personal possessions in her care. Michael becomes addicted to painkillers. Jane files a restraining order against him. She calls the police when Michael shows up at her apartment, but Sydney gives him refuge. After Michael talks Syd into getting him more pills, she finds him passed out on his bathroom floor. Alison refuses to move to New York with Billy, and suggests they try a long-distance relationship. Jeffrey fears that his relationship with Matt could jeopardize his career.

Jake and Amanda pull out of Reed's business when Jake discovers some inconsistencies in his story, but Jo accuses him of jealousy. Reed picks up a shipment of drugs on the boat while Jo is sleeping on board. When Jo discovers drugs stored in a compartment below deck, Reed assaults and kidnaps her. Sydney overhears a semi-comatose Michael babbling about his plea for Matt to change his blood alcohol results. She lays the groundwork for a blackmail scheme. Frustrated by her inability to get in touch with Billy, Alison flies to New York to surprise him. She is stunned to find him having drinks with another woman. Jeffrey is transferred to the east coast after coming out of the closet.

Reed plans to start over in Mexico after one last major drug deal. Jo knocks him overboard with a harpoon, but the boat runs out of gas. When Reed climbs on board and holds her at gunpoint, Jo is forced to shoot and kill him. She is arrested when the Coast Guard raids the boat. Alison accepts Billy's explanation about his date, but breaks up with him again when he wrongly assumes that she is moving to New York. He follows her back to Los Angeles and surprises her with a marriage proposal. Sydney presents her blackmail demands and moves in with Michael.

Jo faces murder charges following Reed's death. Jake is angry when Amanda refuses to help Jo because she could be implicated through her financial ties to Reed. She later has a change of heart, hiring her accomplished family attorney to represent Jo and putting up the apartment building as collateral for her bail. The charges are eventually dropped; the D.A. knew that Jo's crime was self-defense, but wanted to press her for information about Reed's associates. Alison accepts Billy's proposal. Billy tells Amanda that he wants to tell Alison about their one-night stand (but doesn't follow through), so Amanda confesses to Jake. At the engagement party, Jake decks Billy after being asked to serve as best man. Amanda explains the situation to Alison. Alison is stunned by the news, but forgives Billy. Sydney continues to charm everyone at the hospital, and even convinces the chief of staff to let Michael return to surgery. Despite his protests, Syd decides that she and Michael are getting m

Sydney and Jane get into a catfight in the pool after Syd tries to take Jane's wedding dress (a family heirloom). Their mother comes to town, but cannot talk Syd out of the marriage. Michael and Sydney are married at the beach house, with only Matt in attendance. Inspired by a dream, Michael decides to take Syd on a honeymoon and murder her. Jo learns that she is pregnant with Reed's child, and plans to have an abortion. Jake takes her to dinner instead of dining with Amanda and her boss. Amanda is jealous of the amount of time Jake is spending with Jo, until she learns about the pregnancy. Jo decides to have the baby. Billy's co-worker Celia and Alison (inspired by a comment from Amanda) lay a guilt trip on him until he buys Alison a more expensive engagement ring.

Michael attempts to kill Sydney during their honeymoon in the mountains of northern California, but fails twice. Matt pursues them in the hopes of preventing the crime. Michael has the chance to push Syd off a cliff, but cannot go through with it. Sydney vows that he will love her one day. A guilt-ridden Matt tells Jane that he altered Michael's blood alcohol records after the accident. Jane uses a signed confession from Matt to blackmail Michael and Sydney into staying married. Jo is haunted by visions of Reed, and is angry when she learns that Jake has decided to start a charter service on Reed's boat, the Pretty Lady. He convinces Jo to face her guilt head on, and she visits Reed's grave site to offer her forgiveness. Amanda erupts after seeing Jake comfort Jo. Alison decides that she and Billy won't sleep together again until after the wedding.

Billy ignores Alison's wishes and tags along when she heads to Wisconsin for her father's fiftieth birthday party. He is furious when Alison refuses to share the news of their engagement. When Alison's ex-boyfriend Adam serenades her during the party, Billy announces the engagement. Adam warns Billy that the Parker family is ""weird."" Alison is haunted by nightmares after returning to L.A. Jane and Sydney's grandmother dies. Jane learns that she is to inherit $100,000, and decides to start her own design firm. Her plans are complicated when Syd and Michael seek a cut of the money because it is willed to ""Dr. and Mrs. Michael Mancini."" Michael confronts Matt about his confession to Jane, and they duke it out. Jo's potential romance with a model is quashed when he learns about her pregnancy.