Will and Gwen have a romantic night together in the cabin, but Gwen is awakened by a dream in which Billy is crying, and she can't go back to sleep. Jennifer goes by Carly's house and asks to hold Billy for a while, since she is leaving for Europe the next day. Jennifer leaves just as Jack arrives home, and goes home to Barbara, where she admits that when she holds Billy, she thinks that he is her lost baby. Jen is so upset that she calls the airline and makes plans to leave that very night.
At the hospital, as Susan is telling Meg that her key to the records room have disappeared, Paul has just deleted Rory Cabot's record from the computer. Emily starts to shred the paper copy of the report, which shows the baby's blood type, when Hal and Dusty burst in the door. Dusty looks at the partially shredded page and announces that there is enough evidence to prove that Jennifer is the baby's mother. Hal tells Paul and Emily, "This sheet of paper is enough to send you both to prison." Hal discovers Susan's ID in Emily's hand, and demands that Emily tell him what Paul "coerced" her into doing. Emily responds that she loves Paul and will not betray him. Susan watches as officers arrest Paul and Emily and lead them out of the hospital. Dusty and Hal go to a lab technician and have a DNA test done to compare a strand of Jennifer's hair to the partially shredded report on the baby. The technician confirms that Rory Cabot is actually Jennifer Munson's baby. Hal rushes to the courthouse to find a judge who will restore the baby to Jennifer.
When Dusty tells Meg the news, she begins to worry that Paul will implicate her. Her worry increases when Dusty tells her that he wants to be with Hal when he gives the baby to Jennifer.
Emily and Paul wait together in a room at the police station when Susan arrives and asks them, "What kind of monsters are you?" She continues, telling Emily that she has regressed into an unstable, dishonest child again.
Hal and Dusty arrive at Jack and Carly's house with the court order to take the baby.
As Paul and Emily wait to be formally charged for their crimes, Paul gets a call from Jennifer that she's leaving earlier than expected. Realizing she still hasn't been told, he urges her to leave for the airport right away, to avoid Dusty's big bombshell that her baby is alive. Jennifer prepares to leave, and shares warms moments with Barbara. Meanwhile, Emily and Paul begin to wonder how the truth finally fell into Dusty's lap. It's then that Meg enters the police station and a suspicious Emily and Paul try to trap Meg into confessing. But, Meg insists she wouldn't have told Dusty, especially since doing so would result in her losing him. Paul believes Meg but Emily still has her doubts. Later, Emily's given the chance to turn on Paul when Hal presents her with the option of going to jail or turning state's evidence on her husband to be. Meanwhile, Gwen and Will are enjoying a time out of time up at the cabin, completely unaware that back at Milltown, Carly is being forced to turn Billy over to Hal and Dusty. Carly does her best to put them off, insisting they wait until Gwen gets back before doing anything. But, Dusty and Hal present Carly with a court order demanding she give the baby up or be arrested for not doing so. Finally, Carly does as she's told, and breaks down in Jack's arms, feeling as though she has now failed both her sisters. Lily realizes Holden's not giving up when it comes to putting off their divorce. When Keith comes upon them in a private conversation, he is not happy about it. Privately, Keith reminds Lily of her promise to him. But, Lily points out that she promised to marry him but not to love him. She goes back to the barn under the guise of saying goodnight to the children and comes face-to-face with Holden. Unable to deny the chemistry between them, they come together for another kiss, which quickly becomes passionate and they begin to make love.
Dusty comes upon Jennifer at the Lakeview and presents the baby to her. At first, she can't accept what he is telling her and Dusty must show her the court order and the evidence as proof. Finally she begins to understand and is overjoyed at the gift Dusty has brought her. She begins asking questions about how this happened but Dusty skirts the issue of Paul's involvement. They fuss over the baby and before he takes off, it is clear how much Dusty is affected. Meanwhile, at the hospital, Meg is with Susan who is horrified by Emily's part in the baby switch. A concerned Meg sets off to meet up with Dusty. Meanwhile, Emily refuses to turn state's evidence against Paul. Hal is insistent and Emily calls him on it, realizing that this is more about Hal's love for her than it is about the case. But Hal points out that by sticking with Paul, she is going to lose her son and her freedom. Meanwhile, Paul is faced with Barbara, who has been ushered to the station at Hal's request. Barbara struggles to understand what Paul did and begins to attack Emily for bringing down her son. After making love in the barn, Holden asks Lily if she is now going to leave Keith and come back to him. Remembering her promise, Lily tries to say no, but has a hard time resisting Holden. Keith then calls and Lily lies that she's with the kids. However, when she prepares to go, she leaves Holden with a bit of hope for their future. Later, Keith runs into Luke at Java and realizes something is amiss. When Lily meets with Keith, she covers successfully and convinces him that they just have to wait Holden out about the divorce. Later, however, Holden assures Luke that sooner or later, Lily will return home to them.
Jennifer emotionally thanks Dusty for giving her her son back, but admits she's been troubled by the details and feels that so much doesn't add up. Dusty explains to Jennifer that it was Paul who switched the records. A heartbroken Jennifer gives the baby to Barbara and goes to confront Paul in his cell. After, Meg covers her guilt when Dusty says how proud he is of her for helping bring the truth to light. Meanwhile, Gwen and Will return from their romantic night away. When they get to Milltown, Jack and Carly are forced to break the horrible news to them that the baby isn't there. Jack explains about Craig switching the babies and Gwen goes ballistic, furious that Carly gave her baby away. Gwen then demands to know where her son is and Carly has to break the news that Gwen's baby was the one who died. Gwen flips out and there's nothing a heartbroken Will can say or do to comfort her. She takes off for Barbara's Lakeview suite, and Barbara answers the door with the baby in her arms. Meanwhile, a furious Tom tells Emily he's going after full custody of Daniel but Paul promises Emily he won't let that happen. A worried Mike is desperate to get out of the hospital and find Katie when she suddenly enters his room. But, BJ is with her and Katie is forced to keep up the ruse that they're not together. Mike is about to blow Katie's cover when the nurse comes in and interrupts, chasing Katie and BJ out. After, Katie sneaks back into Mike's room, and they reunite. Mike insists that Katie has to stop playing this dangerous game with BJ. Meanwhile, BJ meets with Olga and orders her to finish what she started with Mike. Later, Olga enters Mike's room and pulls a hypodermic needle out of her pocket.
At the hospital, Katie told Mike she was going to meet BJ at Java, and Mike insisted that she had to break things off with him. Katie said she would, and she left. Olga came into the room after Mike fell asleep and was about to inject him with something when she heard Maddie outside the room; she hid, and while Maddie woke Mike up and talked to him, she slipped out of the room and went back to Fairwinds. Maddie found out from Mike that BJ and Katie were back, but Mike said Katie couldn't help her try to find Henry any more, because it was too dangerous. Maddie cried, and Mike said he would try to find Henry after he got out of the hospital if Maddie would promise not to push Katie into trying to get to BJ anymore and promise not to go after BJ herself; Maddie promised.
BJ took Katie back to her cottage, saying he felt like being alone with her. He found pictures of Katie and Mike and got Katie to agree to burn them in the fireplace. BJ told Katie that now that they'd taken care of Mike, they just needed to take care of Henry; he said he had called Henry in California and told him he needed to come back to Oakdale so Katie could see him and that Henry had said he would get there as soon as he could.
At Fairwinds, Henry sweet-talked Olga into believing that BJ was treating her poorly and Henry would know how to treat her right. She grabbed Henry and kissed him, and when she got him down on the floor, Henry told her she deserved a comfortable bed, and he suggested they go upstairs. Olga unlocked the wine cellar, and Henry turned and threw her back into the cellar and escaped.
At the Hughes' house, Casey showed Tom his acceptance letter to the University of Wisconsin; Tom was happy for him; Casey appeared to be most interested in what fraternity he could join there. When Margo came home, she congratulated Casey on being accepted at his first choice of colleges. Tom tried to tell Margo that while she'd been out of town, something had happened concerning Gwen's baby, but Margo didn't want to talk about it.
Gwen went to visit the baby at Barbara's apartment; Barbara wasn't going to let her in, but Will intervened. While the baby slept in her arms, Gwen told him she knew he would have a good mom but that his new mom could never love him more than she did. As Barbara took Johnny away, Gwen told Will, "He'll forget me, but I will never forget him." She asked Will what the baby's real name was, and Will said, "John Dustin Kasnoff," but that he thought it would probably end up being Munson instead of Kasnoff. That made Gwen realize that her baby had been buried under that name at the cemetery. Gwen told Will that she needed to be alone, and she left without him. Barbara stopped Will from following Gwen, telling him he needed to leave her alone and that she had to tell him something about Paul.
When Gwen left, she went to the Hughes' house. Tom and Margo were talking to Casey about college, and when Gwen came in, she told them she thought they should know that Billy wasn't her baby, that Craig had switched her baby with Jennifer's baby at birth, and that was why the DNA test hadn't proved Casey was the baby's father. She then told them that her baby by Casey was the one who had died.
Meg questioned Dusty yet again about whether he might want to get back together with Jennifer now that things had changed. He insisted he wouldn't and told her if she didn't stop asking things like that, he'd have to take back the gift he'd bought for her, which was a beautiful necklace. Meg told Dusty she wouldn't always be insecure like this, then she got a call from the hospital and had to leave for a while. After she left, Dusty called Jennifer and left a message saying he would stop by the Lakeview to see how she was doing after her visit with Paul.
Jennifer went to the jail to see Paul and to ask him if it was true that he had kept her from her baby. Paul told her everything that had happened, from Rosanna finding out and trying to tell him, to Craig running her off the road, to Paul eventually figuring out that the babies had been switched and going to see Craig in jail to try to confirm it. Jennifer didn't want to hear his excuses that he was trying to protect her from Craig, saying this was really all about Paul and Craig and about Paul and Rosanna. She asked Paul how long he had known, and then she realized that he'd known as far back as when he'd found out that Rosanna had gone into a deeper coma, which meant he'd known her baby was alive since August. Jennifer also realized that Emily had known for some time about the switch. Paul asked what he could do to make things right, but Jennifer told him she was done with him, that he was no longer her brother, and then she left.
A bailiff came to take Paul to his arraignment, and as he left the cell, Will stormed up, grabbed Paul, and said, "You did this! You!"
Jennifer arrived back at the Lakeview, crying and fumbling for her keys; when Dusty walked up behind her, she fell into his arms, sobbing.