Kelly's dressmaker turns out to be Ginger, Danny has a soccer match, Mason says CC slept around a lot before he met Sophia.

Joe goes to Alaska to find out info on Dominic. **First appearance of Jonna Leigh Stack (Summer Blake)

Kelly missing, Dominic breaks into Santana's apartment and steals her letters, Dominic goes to the gazebo.

Cruz arrives to help with the oil rig fire, Kelly asks Peter if he wants to move to New York.

Joe and Peter fight at Cruz's, Augusta and Lionel create their circle of truth, David Hasselhoff cameo, Kelly goes to see Joe at Cruz's and gives him the ring back.

Peter records Mason and Veronica talking in the presidential suite, Cruz finds out from Joe about Santana's baby.

Kelly and Joe meet at Cruz's houseboat, Danny saves Jade from the sleazy producer.

Ted & Laken meet their parents at the snack bar, Peter & Kelly fight and she leaves, Santana tells Cruz she & Channing used to meet at the gazebo. **First appearance of Paul Burke (C.C. Capwell)

Auction for the Lockridge beachfront property starts, CC takes Santana for a plane ride, Kelly returns to Santa Barbara.

Joe takes Kelly to meet Dominic, Ted, Laken, Danny, Jade look at renting the motel for a hangout, Santana meets Gina & Brandon.

Someone is making a bomb. Santana is about to take a bath when she spots Mason. Naturally, Santana becomes upset and gets Mason to leave. Kelly sees Joe, and Peter notices how if affects her. He thinks something should be done about Joe. C.C. arrives with two thugs, and Joe gets thrown into the water. Thanks to a carrier pigeon, Ted receives a note from Danny and learns that Danny wants to go to Hollywood. Jade pays a visit to the restaurant Danny is working.

Kelly goes looking for Joe, Veronica juggles Lionel, Peter & Mason, CC offers Cruz a full-time job on the rigs.

Ginger and her thugs show up at Peter's and blackmail him, it's revealed Dominic is a woman, CC and Santana make love.

This great soap opera begins with a flashback to a party in honor of Channing Capwell Jr. in Santa Barbara, California in 1979. Channing and his older brother, Mason, are entertaining the guests until the butler, Phillip, gives Channing a note. Channing asks the maid, Santana Andrade, if he'll see her tonight. He then follows instructions to go to the Capwell study. When Channing enters the study, it's clear that someone was waiting behind the desk. The person points a gun and pulls the trigger. Seconds later, Channing is lying dead on the floor. ""Santa Barbara"" then cuts five years ahead in time to the San Quentin prison on July 30, 1984.

Laken has a romantic fantasy about Ted. John goes home and is shocked when he sees what happened to his house. Worried about his daughter, John wants Jade to stay with him. Jade refuses to make a choice between her parents, though. At the warehouse, the stranger informs Joe that he's the one who called the fire department tonight after the explosion. Joe reveals to the stranger, whose name is Dominic, that he found Channing dead with a guest at Channing's big party. However, the witness never came forward.

Cruz in the hospital, Santana finds out her private investigator is working for CC, Dominic arranges a meeting for Kelly & Joe.

Peaches gets her purse stolen, Laken arrives in Hollywood, Joe & Kelly meet at the stables, Joe goes to work for Augusta.

A sarcophagus arrives at the Lockridge house, Santana out cold after falling off a horse, Lionel arrives in Santa Barbara. **First appearance of Nicolas Coster (Lionel Lockridge).

Joe & Kelly argue on the yacht, Peter comes in with a gun, Santana leaves for Acapulco.

Kelly reads some of Joe's letters, Jade arrives in Hollywood, Santana back from Acapulco.

Cruz goes to the Capwell house to rest, Peter and Augusta chat about old times.

Joe kisses Kelly (replays), Jade has a screen test with a sleazy producer, Joe gets drunk and goes to Augusta's, Kelly goes to Peter's.

Mason tells Santana that two people saw her with the gun yesterday. He reminds Santana that she had no permit to carry the gun. ""I'm here to help,"" Mason smiles. Santana doesn't trust Mason at all and decides to talk to a lawyer friend. Rosa feels betrayed by C.C. and decides to confront him. She wants to know what happened to Santana's child. C.C. claims he doesn't know and denies that he forced Santana to give up her baby. Rosa thought C.C. trusted her. After all, she started working for C.C. twenty years ago and mothered his children when his wife passed away. C.C. explains to Rosa that he had dreams for Channing and imagined that one day maybe Channing might even be president.

Ted & Danny arrive in Hollywood, Santana talks to the doctor who delivered her baby, Peter gets hurt at polo.

Santana hires a private investigator, Augusta offers Joe a job, Joe breaks into the Capwell house.