Mike and Katie return from recycling their Christmas tree and find Katie's front door open. Katie immediately finds the cage of her pet rabbit, Snickers open. She panics, so Mike goes back outdoors and follows rabbit tracks to find the little white rabbit sitting beside the pond. He catches the rabbit, but falls into the pond himself. When he returns, he finds Katie holding Snickers. After they introduce the new rabbit friends, Katie offers to dry Mike's clothes while he takes a hot shower. After his shower, Mike comes downstairs wearing a towel, which shows off his wonderful muscles. They begin kissing and make love in front of the fire.
Lily comes to Rose's old house to get Rose's mail and tells Mitzi that Paul has been arrested for Rose's murder. Mitzi turns away and smiles to herself, "That's the best news I've heard all day!" Mitzi offers to keep Rose's Roller Palace open, and Lily promises to think about it. Lily leaves for Paul's arraignment, and soon Carly appears at Mitzi's door. Carly tells Mitzi that she and Emily smelled Mitzi's perfume in Rose's house before the murder, then directly accuses Mitzi of murdering Rose. As Carly starts to leave, Mitzi grabs her and tells her the story of Angie Russo, a fellow dancer from Atlantic City, who got too suspicious about things and "now she can't dance any more." Carly walks out the door, stunned by Mitzi's implied threat.
Lily returns home and Holden tells her that he doesn't trust Mitzi, since she stole from Rose and lied to her. Lily asks him to give Mitzi a chance, and Holden agrees, but he still urges her to pack up Rose's belongings and to sell the shop. Lily responds, "Maybe when Paul Ryan is put away for life, I can start living mine again." Lily insists that she must attend Paul's arraignment, reasoning that Rose would have done the same for her, but she turns down Holden's offer to accompany her, saying, "Dusty will be there." Holden warns Lily not to lean on Dusty out of guilt for not heeding his warnings about Paul. Lily angrily accuses Holden of questioning all her choices, but apologizes to Holden before she leaves. Holden promises Lily, "I will not give up what we have," reminding her that he felt a loss as great as hers when he thought he had lost her. Lily promises Holden that she will keep their family together.
As soon as Craig reads the news of Paul's arrest in the morning paper to Rosanna, she rushes out to see Paul. Pretending to sympathize with her, while recalling that he himself was the one who put the poison goblet in the mausoleum and lured Paul to the mausoleum by a phone call, Craig offers to go to the police station with Rosanna. However, as they prepare to leave, Craig receives a phone call from Annabel Fettle, who insists that he meet her at once or else she will go to the police. Craig stays behind, and Mrs. Fettle comes over and demands that Craig furnish a place for her to stay until it is safe for her to return to Ottawa. After she threatens to tell Rosanna that Crag cut corners in Cabot's adoption, he ushers her around the corner, saying that he knows just the place for her.
Jennifer arrives at the police station to support Paul, and Jessica shows them the civil suit which Dusty has filed against Paul, which will freeze Paul's assets until after the bail hearing. When Jessica leaves to try to postpone the bail hearing, Jennifer suggests to Paul that they appeal to Barbara for bail, but Paul refuses, since he is convinced that Barbara is the one who set him up. Jennifer insists that Barbara would never incriminate Paul, and further, she would not take a chance of being separated from Will. Rosanna bursts into the interview room and offers to post bail for Paul herself. Paul tries to refuse, telling Rosanna, "The evidence against me is overwhelming....I'll be damned if I'm going to take you down with me." Rosanna reassures Paul that she knows that he is innocent because she is convinced that he loved Rose, and in fact he still loves her. When Jessica and Jennifer come back in to take Paul to his arraignment, Paul announces that Rosanna is posting his bail. Delighted, they all agree that the kind of faith Rosanna has in Paul will go a long way, both in and out of the courtroom.
Dusty admits to his attorney on the telephone that his purpose in filing the civil suit is to freeze Paul's assets until after the bail hearing. Molly comes into Metro and begs Dusty for forgiveness. At first Dusty tells her that he forgives her, but that he does not love her, "No matter how hard you try, there's no sale. There's no us! Get it?" He accuses Molly of ruining the chances of finding Rose's real killer by tampering with the evidence, then warns her, "You're going to pay! After we put away Paul, we'll take care of you." After he leaves for the arraignment, Molly muses, "If Dusty's not going to help me, maybe Lily will."
Henry interrupts Mike and Katie on the verge of making love. A relieved Katie sends Mike home. She wants everything to be perfect when she and Mike make love for the first time. Since she can't keep her hands off him, she insists Henry act as a chaperone. Meanwhile, Mike discovers that a tree has fallen through his roof. When Katie finds out about Mike's problem, she invites him to move in with her. At the courthouse, Paul arrives with Rosanna. Lily declares that any friend of Paul's is no friend of hers. Bail is set at one million and Rosanna posts bond. Lily lambastes Rosanna and Rosanna and Paul put their heads together to trap Barbara. Paul reveals to Rosanna that Barbara stole the goblet. She offers to approach Barbara. Dusty and Lily pressure Tom and Jack to nail Paul. Jack reassures them that he's got a warrant to search Paul's apartment and they insist on being there. Meanwhile, Holden blasts Molly for trashing Rose's car and he begins to believe that she might be capable of murder. Craig tries to install a disguised Annabelle Fettle in a motel room but she wants swankier digs. He persuades her to stay put. They watch a report on TV of Rosanna bailing out Paul and Craig is not happy. Will blows up at Hal when his father reveals that Paul has been arrested. At Barbara's insistence, Dr. Michaels calls and Hal agrees to allow Barbara to see Will. Dr. Michaels warns she and Hal will be watching her. Barbara assures Will that Paul will never be convicted because they both know he's innocent. She secretly passes Will a Palm Pilot and tells him that if he betrays her, she'll be put in prison and die. A scared Will covers for Barbara.
Jessica blames herself for not keeping her promise to Bonnie and taking care of Sarah, who is about to be transferred to another facility. Later, Jessica sees a sullen Sarah, and calls out for her to stop. Jennifer convinces Walker to work with her and Jessica to clear Paul. Curtis shows up for a job interview with Dusty. Ben tries to dissuade him from working at Metro but they wind up striking a deal. Curtis can work there if he goes to Oakdale Latin and keeps his grades up. Aaron tells Alison that he won't rat her out to Chris, but he won't claim to be the father either. Alison fears Chris will try to take her baby away, but Aaron's determined to win Lucy back. She is about to spill all to Chris but Nurse Tish chills her, noting Chris has moved on and doesn't care about her anymore. Lily urges Craig talk to Rosanna and stop her from helping Paul. Hal searches Paul's, confiscating many of his possessions. Lily and Dusty arrive but Hal gets rid of them. Hal admits that he believes Paul is innocent, even though the evidence points to him. Rosanna surprises Barbara with the same glasses and goblet that Barbara stole from the church. She toys with Barbara, trying to get her to confess to setting up Paul. Dusty and Lily commiserate about missing Rose. Carly shows up at Paul's and declares that she'll never forgive him for what he did to Rose, but she doesn't believe he killed her. She shares her suspicions about Mitzi, but Paul insists that Barbara is guilty and Rosanna is trying to help him prove it. Meanwhile, Craig shows up at Barbara's and announces that he's there to save Rosanna. Barbara realizes it was Craig who set Paul up.
Katie started to fantasize about her and Mike together when Mike and Henry came in to the house. Katie doesn't want Henry to leave because she was afraid of giving into her feelings for Mike. Henry knew what Katie needed and told Mike that he should let Katie make the first move. Mike and Katie were enjoying Chinese food and talking. Mike said they needed to clean up and Katie asked what he wanted to do. Later, Katie showed Mike to his room and said goodnight. Then she went in and changed into something provocative and when she went back to Mike's room, she just told him where the extra blankets were. Finally, Katie went into Mike's room but he wasn't there. When she heard him coming Katie hid under the bed. As Mike sat on the bed, Katie let out a sound. Katie couldn't explain her way out of it and tried to tell him how she felt. Mike interrupted her and as he was telling her how he felt about her, she leaned over and kissed him!
Mitzi showed up at Lily's but Holden tried to keep them from seeing each other. Lily told Holden that she was okay and asked Mitzi in. Lily started to talk about Rosanna putting up Paul's bail. Mitzi played along with Lily and agreed to everything Lily said. Mitzi tried to get Lily to let her run the Roller Palace but Lily didn't want to talk about it. After Lily left, Mitzi wondered what a girl had to do to get what she wanted in this town. Later, Craig showed up at Mitzi's door and asked her how she would feel about being an eye witness to Rose's murder.
Lily arrived home to hear Luke say that Lily had changed and when Lily tried to talk to him, Luke ran out of the room. Lily cried to Holden that she shouldn't be doing this to her family but felt she owed it to Rose to find out who murdered her.
Jessica stopped Sarah and Troy from leaving. She placed a call to Ben and asked him to join her at Al's Diner. Jessica wanted to become Sarah's foster parent. At first, Ben seemed reluctant but finally agreed because he wanted to support Jessica. They told Troy that they wanted to be Sarah's foster parents if Sarah wanted it. They told Sarah but Sarah didn't respond. Troy told them to all go home and talk it over. Sarah got up and walked out.
Jennifer told Paul that she and Jessica had hired Walker Daniels to investigate Rose's murder. Paul still thinks that Barbara has something to do with Rose's death. Paul asked Jennifer to spend as much time as she can with Will and to stay out of the investigation. Later, Paul hired a private investigator to keep an eye on his mother. When Rosanna showed up at Paul's door, Paul wanted to know if Barbara told her about Craig setting him up. Rosanna told Paul that even though Craig is no saint, he wouldn't do anything to ruin what they have.
Barbara figured out that Craig is the one who is trying to frame Paul. Rosanna stuck up for Craig. Rosanna and Barbara continued to argue until Craig rushed Rosanna out of the room. Over at Al's Rosanna started to question Craig about Barbara's accusations. Rosanna told Craig that he wouldn't be stupid enough to jeopardize what they had. Rosanna left again to see Paul.
Carly and Jack argued about Mitzi because Carly thinks that Mitzi is the one who murdered Rose but Jack doesn't think it's possible. Craig wanted to talk to Jack but Jack walked away. Carly told Craig her suspicions about Mitzi prompting Craig to pay Mitzi a visit.
Alison and Chris bump into each other and Alison drops a bunch of towels on the ground. Chris starts to help her clean up the mess until his new girlfriend arrives. Chris stands up and walks away. Emily and Susan want to throw Alison and Aaron a wedding and baby shower. Alison doesn't want the attention; she'd rather take the money. Susan decides to loan the couple two thousand dollars to help decorate the new apartment, but they still want to throw a party. After Emily and Susan leave, Alison calls Henry and asks to meet in ten minutes. Later at Al's diner, Alison wants to hire Henry. "All you have to do is fix it so that Chris never bothers me again." She'll pay him two thousand bucks to help out. He advises her to just get a new job. Alison cuts him off and blurts out Chris is the real father of her baby and he'll take the baby away from her if he ever finds out. Henry is momentarily shocked, but still advises her to come clean. Alison wants to know how to squirm out of the situation, "You're the best liar I know...it's like a gift!" He declines the money, asks her to tell the truth, and walks away. Alison stews in her misery for a moment, then calls information. She asks when the next bus leaves for Chicago.
Katie and Mike continue to consummate their relationship (as she wears her wedding ring). After, Katie feeds him strawberries, then they start round two. Later, Katie tells Mike how happy she is to experience these feelings again. Next comes round three.
Jack apologizes to Carly with a rose. Jack doesn't support Carly's suspicions about Mitzi, but agrees to listen to what his wife has to say anyway.
Lily sees a vision of Rose and promises to finish whatever she thinks Rose feels she didn't accomplish.
Mitzi tells Craig she won't become an eyewitness to murder, but he persuades her into helping him with his plot by promising her financing to the Roller Palace. Later, Mitzi knocks at Lily's door. She fights back tears as she hints that she may have seen Paul put something in the glass at the wedding.
Molly wraps a bottle of 100-year-old liquor with a flower as a peace offering to Dusty. He says, "You can keep your booze. From now on I drink alone." He takes pleasure in knowing that Molly will probably be charged with tampering, among other things. He gets a call from Lily. She says Mitzi has testimony he must hear. After he hangs up, he turns around and finds Paul staring him in the face. Paul asks for Craig. Dusty bluntly tells him he has a new policy of not serving murderers at his bar and asks him to leave. Dusty leaves to visit Lily. Paul and Molly chat and she also points the finger at Craig. He asks her to keep an ear out for anything suspicious. She wants Paul to help her beat the tampering charges in return, but Paul wants Molly to help out of he goodness of her heart. Ms. Fettle walks down the staircase in Dick Tracy garb. Paul leaves. Fettle demands to see Craig. After Molly tells her that Craig's sister is a police officer, and that she might stop by, Fettle decides to wait for Craig at the hotel. She says, "I gotta go. Tell Montgomery to call me at that festering armpit I'm staying in. We need to discuss arrangements." Later, Molly uses this information to try to cut a deal with Craig.
After Dusty arrives at Lily's, Mitzi tells Dusty her story. Dusty doesn't buy it, but Lily pushes him to believe the lie. Mitzi tries to forget the whole thing and rushes out the door. Lily calls Jack and asks him to make a house call. Carly happens to tag along. Before the four musketeers arrive at Mitzi's place, Mitzi is on the phone with Craig. He encourages her to stick to the story and everything will be fine. Jack knocks on Mitzi's door and find her boozing it up. She denies she said anything to Lily and frantically tells them all to leave. Mitzi starts to wretch and says, "I feel dizzy...I can't breath...I need air." She collapses in Jack's arms.
Paul returns home and calls his private investigator. The PI tells him some news has surfaced and Paul sets up a meeting in his apartment asap.