At the custody hearing, the judge threatens to have Rory turned over to the state until Cass makes the surprising suggestion that Iris be designated guardian of Rory and of Gwen. Carly balks at the idea and even Gwen is unsure that going back to live with her mother is the right answer. But for the sake of her baby, Gwen decides to ride out the three-month trial period until she can prove she can take care of her baby on her own. Carly never fully gives up hope she might still get the baby until Jack firmly tells her it's time to let this go and concentrate on the family she still has left. In an effort to sway Meg not to tell the truth, Paul suggests Dusty go with her to gather a sample of Rory's blood for a DNA test. When Dusty showers Meg with compliments and cites all the reasons he thinks she's so wonderful, Meg can't bring herself to reveal information that will only serve to push Jennifer and Dusty together. But whether Meg's still on the fence matters not when they show up at Iris's door, only to have the as Iris slam the door in their faces before they can explain why they're there. Just when Katie was feeling more comfortable with BJ, he shows up with a Halloween party costume for her: a cheerleading uniform from her high school, in her size. Katie's a little too creeped out to buy that this was just a coincidence and BJ finally admits he is guilty of trying to keep his star performer happy. Later, in a sincere moment, BJ attributes his lack of social skills to his isolated youth that was spent in front of a computer. Katie realizes she may have been too hard on him and shows up at Java to reveal that not only has she accepted his gift of the uniform but that she's wearing it as well.
Maddie shocks Henry with the news that that BJ warned her to keep her mouth shut about his true identity or suffer the consequences. Meanwhile, Katie presents herself to BJ in the cheerleader outfit and apologizes to him for her suspicions. Mike comes in and, turned on by the cheerleader get-up, takes Katie home to make love, despite BJ's best attempts to keep him busy with work. BJ almost blows a gasket when Henry comes in, declaring he'll quit because of his threats to Maddie. BJ is able to once again seduce Henry, this time with a promise to pay for Maddie's higher education. Later, as Henry goes to tell Maddie that everything is under control, BJ orders Kim Hughes to fire Maddie. At the hospital, where Lucinda is recovering from her surgery, she hears from a nurse that Luke has been rushed to a special clinic because his kidneys were failing. She demands to leave immediately but Kim insists she wait for Bob to release her. The two women argue with each other until, grudgingly, Kim helps Lucinda to get released. At Dusty's persistence, Meg knocks on Iris' door again. Gwen agrees to cooperate and gives Meg and Dusty what the came for. Meanwhile, Hal confronts Paul about paying for Gwen's legal fees in the fight over baby Rory. Paul makes up an excuse about doing it for Will, but Hal doesn't buy it and leaves. Jennifer presses for the truth but Paul tries to convince his sister that he thought it was best for her to put the baby behind her. Later, Meg and Dusty arrive with the baby's blood sample and Meg takes Jennifer off to get a sample of her blood as well. With both vials of blood in her hand and unsure of what to do, Meg has to watch as Dusty and Jennifer go off together.
Jen was waiting at the hospital for the results of the baby's blood test. Jen told Barbara that she lied about believing her baby was dead and that Dusty was helping her find the truth. Meanwhile Meg drew a sample of her own blood and pretended it was Jen's blood so the blood tests will come back negative. Dusty insisted he be there while the hospital tech ran the tests. The tech ran the tests and they proved that Jen was not Rory's mother. Dusty told Jen the results and Jen became hysterical saying the tests were wrong. Paul told Meg she did the right thing but Meg was not to sure.
Hal asked for Jack's badge and put him on leave without pay. Carly walked in and begged Hal to reconsider saying Jack only did what he did to protect her. Jack told Carly not to worry about it and that everything would be ok. The main thing Jack was concerned about was Carly and Gwen's relationship. Jack wanted Carly to apologize to Gwen and reminded her that they are sisters.
BJ wanted Henry to help him get some alone time with Katie. Henry did not want to get involved but BJ told him his intentions were harmless. Henry went to Katie's and told Mike he broke BJ's car and needed his help. After Henry and Mike left BJ showed up. After looking for BJ's car for hours Mike decided to stop looking and went back home. Mike walked in on BJ and Katie dancing. Katie told Mike there was nothing going on and BJ left. Feeling suspicious of Henry's story Mike called him and asked him if Henry's story was true about breaking BJ's car. Henry told Mike that he was telling the truth and would not lie to him. After Henry got off the phone BJ gave Henry a lot of money as a thank you.
Will comes to Paul with Rory and asks for his help in case he and Gwen face kidnapping charges. Paul is forced to hold the baby and suddenly, everything he's thought so far comes into question. He returns home to Emily and wonders if perhaps he's done the wrong thing and shouldn't tell Jennifer the truth. But, desperate Emily insists it's too late and reminds him that if he were to come clean now, they would lose everything. Meanwhile, Dusty tries to comfort Jennifer. But, Jennifer tells him that he reminds her too much of her loss, and she doesn't want to see him for a while. Later, a heartbroken Dusty is sitting in his car when Meg shows up and takes him for a ride. Carly makes a peace offering to Gwen, saying she won't testify against Gwen if she's brought up on kidnapping charges. Gwen is suspicious, assuming Carly has an ulterior motive but Carly insists that it would be best for the baby if they could make peace, especially since they now know they're sisters. Gwen continues to reject her, but Carly insists that she still won't help prosecute Gwen. Katie confronts Mike about being jealous of BJ and their moment of dancing. She believes Mike's first instinct was right: BJ is a harmless eccentric. Meanwhile, Maddie confronts BJ about getting her fired by Kim. He then gets her rehired to demonstrate his power. Later, a disco ball arrives at Fairwinds and Katie remarks that it's just like the one at her prom. In private, BJ orders Maddie to take it to the bedroom where Maddie has a fantasy of BJ making out with Katie under the disco ball, which then falls on Henry's head. Later, BJ goes back to the cottage with Katie and gives her a charm bracelet. Meanwhile, Mike finds a picture that Maddie was carrying around and asks: who is Byron Glass?
Paul finds Jennifer at the gravesite where her baby is buried. Jennifer is calm and insists she is there to make peace with the baby she hadn't been paying attention to since she became obsessed that Rosanna's adopted baby was her own. After Jennifer leaves, when a kid in a ghost costume jumps out of the dark and scares him, an emotional Paul runs off, determined to find Jennifer and tell her the truth. When he can't find her, he ends up back at his penthouse, where he falls into Emily's arms, screaming that he can't go through with it any longer. Dusty confesses to Meg that he feels like a failure because he didn't keep his promise to help Jennifer get her baby back. Meg thinks Dusty is being too hard on himself but when Dusty reveals that Jennifer doesn't want to see him anymore, Meg is secretly pleased. Dusty thanks her for being a wonderful friend. They head out for a walk but end up at the cemetery, and Dusty spots the headstone of Jennifer's baby. At the Halloween party, Gwen and Lia get into it and Gwen shoves Lia headfirst into the apple-bobbing bucket. Maddie witnesses Gwen's dunking of Lia and thinks she has found her new hero. Then Maddie takes great delight in telling soaking-wet Lia know how awful she looks with her makeup running and finally convinces Lia to slip out of the party unnoticed. Maddie makes her way over to Casey who she overhears in an argument with Gwen about a baby. Meanwhile, BJ orchestrates an "assassin game" to get Mike to chase Henry into the wine cellar, where Henry locks him up. He also arranges it so that Katie has to chase BJ upstairs where he finally reveals to her who he really is.