As she and Michael argue about her working and having another child, Hope learns about some previous tenants of their house. Hope is making tentative moves toward returning to work full-time. Michael suggests, though, that there might be some problems in doing that and muses about having a second child. Hope, Melissa and Gary find an old trunk in the Steadman's basement full of letters and photos of previous residents, Sally and Roy McCauley. Hope gets lost in these, imagining the courtship of Sally Spangler and Roy, who goes to the South Pacific during World War II. Later Hope and Nancy find Sally's journal. There are more fantasy flashbacks about Roy and Sally getting married and him leaving for war. Later that night as Hope works in bed, Michael comes in and begins to get amorous. Hope, not wearing her diaphragm, stops him. Ellyn finds Hope at home crying. Hope has just read about Sally getting a telegram saying Roy is missing in action.

Things get complicated between Elliot and Nancy as they moved toward finalizing their divorce. They both try to establish new relationships. Scenes of Elliot and Nancy's courtship are intercut with the present-day divorce preparations. Elliot has to get cash advances on his salary from an unhappy Michael. Nancy, using the last name Krieger, calls editor Jack Bronstein about her book. He's enthusiastic but says he can't recommend it yet--the story's a ""little weak."" Meanwhile Elliot's lawyer Adrian tries to talk business with him at a restaurant, but he's more interested in coming on to her. She declines to go out with him. Nancy is working at an office job, and a younger employee there, Terry O'Neil, seems to like her. Later when she and Jack are at her house working on the book, he kisses her. Nancy tells Melissa she's been carrying around her diaphragm! Later, Nancy has a physical encounter with Terry.

As Christmas and Hanukkah near, Hope suffers a minor injury and an unknown illness. Michael has a crisis of faith and imagines his life as a 1960's TV sitcom. Michael and Hope are negotiating over Christmas/Hanukkah celebrations. Mike starts watching TV and sees himself in an old black & white TV sitcom, with the Westons interrupting his plans to be with Hope. The next day at work, Elliot tells Mike he seems distracted. Michael gets a phone call--Hope has been in an accident with Janey. Rushing to the hospital, he finds Janey unhurt and Hope looking tired with some contusions on her face, but otherwise apparently OK. Mike watches the TV show again, this time with Santa in it. He drives Melissa to the synagogue and she encourages him to come on Friday. Michael returns home with a tree and finds Hope getting ill in the bathroom. He tells her to go to the doctor about the dizzy spells she's been having. Another flash to the TV show: Hope is missing on a wintry night.

Melissa and Gary consider having a child together. Gary volunteers his time at a social services center, where he is irritated by and attracted to a brusque administrator. Gary and Melissa's relationship seems to be drawing closer as they both have rejection at work in common, along with thoughts of parenthood for themselves now that Hope and Michael are expecting. Gary goes to a private social welfare agency, the Race Street Project, and meets with Susannah Hart there about a mentoring program for a local youth. Susannah is skeptical of Gary's commitment. Gary meets his charge, Curtis Caldwell, a Stanford-bound student who does not want to be in the program. At a wedding, Melissa meets Russell Weller, a painter who has noticed her at the galleries. He invites her to a party. Melissa goes to the party with Russell. When his good mood turns bleak after a phone call, she realizes that he's gay and has just heard about a friend contracting AIDS.

Ellyn tries to deal with the shock of her parents' divorce and her growing estrangement from Woodman. Ellyn is shocked to receive a call from her father asking her to lunch. With Hope and Nancy, she wonders why he's doing this for the first time in nineteen years. At work she has a disagreement with Woodman during a meeting. Ellyn meets her father, James. His conversation with her makes it obvious that he doesn't really pay attention to what she says. As they are leaving, he drops a bombshell: he and her mother Marjorie are getting divorced, and Ellyn should talk to her. At home, Woodman wonders what's upsetting Ellyn. She just wants to be alone and doesn't know how to act. Later when Ellyn meets with her mother, she wanders through her old house reminiscing about her emotionally distant father. Talking with Michael, Ellyn muses that she should have fallen for a guy like him.

CAPSULE: Michael takes on a client that he, his wife and his friends find repugnant. Gary and Susannah's odd relationship continues to grow. At a diner with Hope, Gary, Elliot and Melissa, Michael returns a phone call to Jerry Kravitz, an old friend of his and Gary's from their college days at Penn. He wants the Michael & Elliot company to do some media work a Senate candidate he represents, Diana McKay. Mike has the first of several flashbacks seen throughout the show of himself, Gary and Jerry involved in demonstrations and campus politics. Gary goes to the Race St. Project and offers to help Susannah write up their grant application. A little attraction seems to be developing. Gary leans in as if to kiss her, but she pulls away. Michael & Elliot take on the McKay account, but Gary, Susannah and Hope let them know they think McKay is a terrible choice. Hope is not too impressed with Jerry either after a night of reminiscing with him and Michael. Susannah apologizes to Gary for the ""w

Melissa gets a job working with Carly Simon. Michael and Elliot face losing their business. Melissa is excited--Russell has shown some of her work around and he might be able to get her the job of shooting Carly Simon's next album cover! When he calls to confirm the good news, Ellyn is with her. Russell also tells her they're going to be a party for Carly and she can invite all the friends she wants. Melissa hides that last bit of information from Ellyn. Meanwhile Michael and Elliot are worried about their biggest account, Motherland Dairies, which has been sold and may drop them. The Michael & Elliot company plays Miles Drentell's DAA ad agency in basketball and loses. Mike relives the game in his imagination, making the winning layup. Later Michael and Elliot meet with the new owners of Motherland, who let them go. Mike is sure this is the end of their company, but Elliot still thinks there is hope. Russell and Melissa are at the Steadman's house.

Flashback scenes of Michael and Elliot meeting, working together, and forming their own company are interspersed with the present-day dissolution of the Michael and Elliot Company. The two have serious disagreements which threaten their friendship.

Gary and Susannah try to figure out what to do when they finds out that she's pregnant. Nancy misses a publishing deadline for her book.

CAPSULE: Elliot gets involved with his wayward father. Ethan suffers an injury. Elliot goes to see his divorced father Charlie who is in town. Charlie introduces him to a woman friend, Roberta Sessions, in a bit of an awkward meeting. When they go to Elliot's sister Ruthie's house for dinner, she gets irritated because her dad won't stop talking business with her husband. Ruthie takes Elliot aside and warns him to not give their dad money or get involved in his schemes. She reveals that Dad never paid for her college like he promised. Charlie tells Elliot he regrets some things in the past, but just looks to the future now. Soon Charlie has Elliot involved in doing some presentation work for a business idea he has. Elliot has Ethan with him at Charlie's hotel room when Charlie shows up with a sitter and says he's taking Elliot out to dinner. Elliot goes reluctantly. While there, they run into Nancy out on a date with Matt Enwright. She and Elliot have a big fight about leaving Ethan w

CAPSULE: Ellyn's work and personal life take a great toll on her, both physically and emotionally. Ellyn has been suffering from an unknown stomach ailment but she tells Woodman and Hope that's she's OK. But at a dinner at the Steadmans she shows a sharp burst of temper, then makes a drunken crack about Michael's business failing. Hope and Woodman both want to know what's been making Ellyn so crazy, but she doesn't give them any good answers. Ellyn goes to her doctor about the stomach trouble. He gives her a referral to a gastro-intestinal specialist; she throws it away. Meanwhile at City Hall, assistant district attorney Dave Callaman, an acquaintance of both Ellyn and Woodman, has been around asking about an investigation he's working on. But he has a personal interest in Ellyn and he asks her out. Ellyn goes bowling with him and tells Woodman she was talking to him about the investigation. Later at work he spies Ellyn and Dave having what appears to be an intimate moment. When Ellyn

CAPSULE: Ellyn, Nancy, Hope and Melissa go on a cathartic camping trip. Melissa gets some camping equipment as a payoff for a photo shoot and the gang makes plans to take a camping trip to the Poconos. But Elliot gets a lead on some work, forcing Michael to have to tell Hope, who has been looking forward to the trip for months, that he can't go. Gary opts out of the trip, and Ellyn, despite her ulcer, decides to go. The four women set off in the car for the journey. On the trail to Parker Cave, Ellyn is gung-ho and pushing the group until they get to the cave, then she's afraid to go in. Nancy and Hope remember the scary old tour guide at the cave from their youth. Ellyn says she'll hike around the mountain cave--seven miles!--rather than go through. Hope decides that she and the others shouldn't leave her. They hike until nightfall, then they make a camp. Nancy's ghost story makes Ellyn more nervous. In the tent that night, Hope inadvertently reveals to Nancy that Elliot had an affair

Michael takes a creative writing class, as does Nancy. Michael incurs Nancy's wrath when he writes about something he heard about her in confidence from Elliot. Also, Michael and Elliot get new jobs working for Miles Drentell at DAA.

CAPSULE: Hope suffers a miscarriage just as Michael and Elliot begin work for Miles Drentell at DAA. Elliot and Michael are in Miles Drentell's office interviewing for jobs at DAA. While they are there Michael gets a phone call from Hope at her obstetrician's office: the doctor has done an ultrasound and it shows a case of fetal demise. Hope acts stoic about it. Later Elliot calls with good news--they got the jobs, with offices and great pay. Mike tells him about the miscarriage. Michael is reluctant to go in to DAA for his first day but Hope insists that he does. Mike and Elliot meet a fellow creative team, Angel Wasserman and Hollis Amato, who seem to be playing with the guys' heads a bit. In fact, they been assigned to the same account as Michael and Elliot, the Spingeri automobile. Michael returns home to Hope, who is glad to see him. The phone rings, and it's Elliot with some work, which secretly disappoints Hope. Hope talks with Val about working for Synergy. Val encourages her t

CAPSULE: Melissa must deal with her aging grandmother who wants her to take over her business. Melissa is preparing to go to her parents for a birthday dinner for herself, her mother Elaine and her beloved grandmother Rose, or Nana, who has runs a dress store for fifty-five years. Elaine thinks her mom needs to move in with her and her husband Murray, but Melissa thinks her mom treats Nana ""like Grandma Moses"", even though she has congestive heart failure! Ellyn, who is therapy now, comes to Melissa with a job offer from City Hall and Melissa takes it, even though she's quite busy. At her parents house, Melissa is taking a family portrait with a couple of other aunts included when Nana has a vivid flashback of a young girl skating. Her behavior worries the others, and they call a doctor. Soon, though, Nana is back at work, critiquing customers, when she has a pain attack. She asks Melissa not to call Elaine, but she does call her, along with a doctor. Nana also has another flashback of

CAPSULE: Nancy pursues her relationship with Matt, but Elliot makes a concerted effort to win her back. Elliot returns the kids to Nancy and has an awkward meeting with her new boyfriend Matt Enwright. At work Elliot and Angel are working closely pitching ideas. Mike asks if there is anything between the two but Elliot says they are just friends. Nancy excitedly gives the big news to Melissa, Ellyn and Hope: her book is going to be published! When Elliot comes by later to see Nancy, she tells him also. He's happy for her, but tells her he misses her and wishes they could get back together. Nancy doesn't know how to respond, but says she still doesn't trust him. Matt makes a date for dinner at Nancy's, but she makes it clear there will be no sex in her house. At DAA, Angel asks Michael about Elliot and Nancy's status. Michael discourages her from going out with him. Elliot tells Mike he's going to confess his affair with Cheryl Eastman to Nancy. Mike thinks it's a bad idea. At Nancy's,

CAPSULE: Hope is writing an article that could affect Susannah's Race St. Project, driving a wedge between her and Gary. Gary and Susannah are proceeding with preparations for parenthood. Melissa doesn't care for Susannah at all and thinks the relationship won't be permanent. Meanwhile, Hope gets a nibble from the Philadelphia Inquirer about doing a story on the Race St. Project. After talking to Rosie at Race St., Hope goes to City Hall to see what Ellyn, fresh from her breakup with Woodman, has to say about the organization. After a few questions about the government's relations with Race St., Ellyn gets a little circumspect, then asks Hope to turn off her tape recorder for the rest of the conversation. Hope tells Michael about irregularities with grant money received by Race St. When Michael tells Gary about this, he's sure Hope and Ellyn must be mistaken. But when he talks to Rosie, she tells him some of the allegations are just practical things that a place like Race St. has to do