Iris spiked her coffee in Java and ran into Jade. Jade recognized her and introduced herself as a good friend to Will and Gwen. Iris pumped Jade for info and told her Will had kicked her out of the house. Iris asked her if she knew where Gwen was so she could speak to her. Jade remembered how upset Gwen was when Iris crashed the studio session. Jade gladly told Iris she knew Gwen's whereabouts.
Gwen and Adam got ready for the photo shoot in L.A. Adam commented on how great Gwen looked. She shrugged it off. During the shoot the photographer didn't think she was exuding enough sexiness. They tried again and Adam talked her through a sexy scenario involving Will. While talking her through this, Gwen mentions Will's brown eyes-they're really green. An embarrassed Gwen walked off. Then in the dressing room Gwen meets the owner of the club they are at. He went on about Adam always hooking up with his singers. Gwen corrects him saying he is her brother-in-law. Adam came in and told her everything was gelling perfectly and she would be singing at the club tonight. The owner came in again and asked Adam about some music big-wig in the audience. Adam admitted to Gwen he wasn't going to tell her, but Gwen was not nervous and ready for the show. There was a knock at the door. Iris busted in.
Holden rushed into Emma's with Faith in his arms. In a semi-conscious state Faith asked her father not to leave them and not to get a divorce. Her parents assured her everything was fine. Later on, Jade joined them and Faith was brought back from the doctor's. She was fine. Faith apologized for riding the horse alone. While Holden and Lily shared a moment on the porch, Luke made Faith a sandwich. She didn't want to eat it and offered it to Jade.
Meg delivered Dusty's x-rays to his hospital room and was surprised to see him there. Dusty told her of Lucy's exit and asked Meg for help escaping. Meg said no. Dusty told her Lucy would go to jail or worse if Craig or the police caught up with her, and if he found her he could take all the blame. Meg came around but she would not help him escape. She said she needed to think like Craig to beat him at his own game.
Craig walked into Paul's apartment. He told Paul about Lucy leaving. He realized Paul wasn't lying when he said he had nothing to do with it. Craig then told Paul he would help him or he would be blackmailed about the bullet switching. Paul refused. Craig produced a box of blanks from Paul's desk as evidence. Paul realized Craig planted them there. Craig wanted Paul to ask Barbara where Lucy went. Paul reveled in the fact that Lucy stabbed her father in the back. Taunts were hurled back and forth. Paul pushed Craig into the wall and then out the door. Craig told Paul that when he set him up for a fall Paul would know nothing about it.
A lonely Craig went to Fairwinds. Meg walked in. Craig asked who sent her. She said she came on her own. She asked him to drop the charges against Dusty. Craig asked why. She said a free Dusty could lead him to Lucy and Johnny.
Back at his apartment, Paul grabbed the box of blanks and went out on the balcony. He went to the ledge to throw them over. The railing gave away. Paul tumbled downward.
Iris shows up drunk at Gwen's performance in Los Angeles. Gwen realizes she's been drinking again. Gwen has reached her limit and throws her out - just as someone comes to get her to go on stage. Iris tells Gwen the crowd is cheering because someone told them to cheer. She's verbally abusing Gwen - telling her she's a nobody and the crowd is going to laugh her off the stage. Adam walks in to check on Gwen and realizes what has been going on. He pays someone to take Iris out to show her around LA. However, it's too late, Gwen is doubting her talent. Adam tries to get Gwen to go on with her performance, but she tells him she can't go through with it. Adam tenderly tells her he believes in her - convincing her to go on stage.
Gwen goes on with her performance and is a hit. She goes back to her dressing room, thrilled about her success. Adam walks in, Gwen jumps with glee and before you know it, she's kissing Adam.
Meg continues to persuade Craig to drop the charges on Dusty, under the guise Dusty will lead Craig to Johnny. Craig tells Meg she would have to do something for him to get him to agree to drop the charges. Craig refuses to drop the charges.
Paul's on his balcony contemplating his discussion with Craig. He leans on the railing to throw the blank bullets over the edge, when the obviously tampered-with railing lets go. He frantically tries to catch his balance, falls, and grabs at the railing, but cannot hold on. But wait! Clawing fingers and hands drag Paul, gasping, back onto the balcony.
Craig calls to argue with Sierra, getting no answers. Paul walks in, throws the phone against the wall - telling Craig he'll make sure he never finds Johnny. Craig feigns surprise when he learns the railing gave way on Paul. Paul threatens to kill Craig if he goes near Meg. Craig, all too willingly, tells Paul Meg came to him. Craig gets a call and asks Paul to leave. Craig pretends the call (from Margo) was from Meg. Paul storms off angry.
Casey is enjoying winning at an on-line game of cards, when Maddie walks into his room. She lets Casey know he was supposed to meet her; he apologizes making more excuses for his behavior. Maddie reaches for his computer to check for something on line when she sees what he was doing. Casey makes an excuse that Ellwood was using his computer. Maddie doesn't believe him, but Casey continues with his story. He claims Ellwood is the one with the gambling problem. Maddie confronts Ellwood and he covers for Casey, taking the blame. Maddie goes to warm up the car and Ellwood blasts Casey for being a coward.
Ellwood, still in the dorm room, answers a knock on the door. It is a man investigating for the on-line gaming site tracking illegal activity they traced back to that room. He text messages Casey that there's trouble.
Margo tells Emily Lucy took Johnny and left town. Margo gets a call and leaves. Meg steps in and asks Emily for her help. Meg begs Emily to try to recall something that would help Dusty's case.
Paul storms off to the farmhouse looking for Meg - shouting her name. It's dark. Paul turns and is staring down the barrel of a shotgun.
Casey returns to his dorm to find Elwood in a panic. Elwood informs Casey about the thug from playpoker.com who visited their room to find both him and Casey and confront them about their online gambling and their cheating the site. While Casey and Elwood are discussing their dilemma Maddie runs into Will in the hall at the dorms and as they are discussing Will getting into Oakdale University the guy from the poker site asks them if they know Casey. Maddie points out Casey's room and then goes into Gwen's room with Will where they discuss their happy lives. When the guy returns to Casey's room he confronts them and tells them that he knows who they are and that they have been playing in collusion and breaking the rules of the website and need to repay their winnings to the tune of $2,800. When Maddie and Will return to Casey's room he sneaks out and avoids telling Maddie the truth by saying that Elwood is in trouble with physics and he is just trying to help
Meanwhile, in L.A. Gwen has finished singing and is back in her dressing room when Adam comes into congratulate her on a job well done and the two kiss just as Iris arrives to see the entire thing unfold. Gwen pulls away and starts to pack and wants to go home as quickly as possible. On the plane back to Oakdale, Gwen talks to Adam about their kiss and he says it was just not a big deal that he just got carried away. She tells him it shouldn't have happened and he tells her he would kiss her again, but she would just break it down and analyze it. A few rows back Iris tries to listen in on Adam and Gwen. Later, Adam tells Gwen that she will need to leave school and dedicate herself fulltime to her music career. Back in Oakdale, Casey and Elwood talk to the guy from the website and Adam arrives at the dorm and after hearing about what the two have done he pays off the website. Adam then tells Casey that he, Casey, is going to tell his parents about his problem gambling. Across the hall, Gwen has returned to her dorm and tells Will all about her trip and how the record executive wants to hear her demo, but doesn't mention Adam kissing her. Will then lets Gwen know that he has been accepted to Oakdale University and he is so happy they will be on the same schedule. After hearing his news, Gwen informs him that she may be leaving school to focus on her music. Will agrees to support her, but seems worried about what this might mean for their future. In the hall Will runs into Iris who insinuates to Will that something happened between Adam and Gwen.
Carly runs into Jack at Java and the two talk briefly about Sage's lost "crystal" and as Jack turns to leave he is face to face with Prince Adolfo and Vienna who have come to Oakdale to find out about the stolen jewels. The prince reminds Jack that he was in charge of security and threatens to take the story to the papers and ruin his reputation. After the prince leaves, Jack goes back into Java and tells Carly that the prince is back and angry that the jewels have been stolen. Jack stresses the importance of finding the necklace. Carly tells Jack he has no proof that Simon stole the necklace and that the diamond she was given was a fake. Jack tells her that the only way that her necklace could have been such an exact replica of the prince's jewels was if the jeweler had the original to use as a model. Jack tells her that if she keeps associating with Simon she will end up in jail. Carly admits to Jack that he has scared her, but that she doesn't know anything about the heist. Carly tells Jack she will think about what he has said and that she will always care for him. Jack repeats that if she wants to keep what she has left she needs to say good-bye to Simon.
Back at the Snyder farm Paul finds himself at the end of Emma's shotgun after he has burst into her home looking for Meg. Paul tries to explain to Emma that he is only their to talk to Meg and Emma stresses to Paul that Meg wants nothing to do with him and he is no longer welcome on her farm. Just as Emma is running Paul off, Meg returns and agrees to talk to Paul. He tells Meg that he heard Craig talking to her and agreeing to meet her and she explains that she had not talked to Craig and he just set him up. Paul tells Meg about the incident on his balcony and his suspicions that Craig planned it and she reminds him that she told him to get the railing fixed. Paul tells her he loves her and will stay away from Craig and do anything to be with her. Meg says she doesn't believe him and tells him to leave and he goes. As Paul drives away he makes an angry call to Craig and then his car slips on an ice patch. Paul recovers, but in his anger over losing everyone to Craig he speeds up and then loses control of his car.
At the dorm, Iris threw Will hints about Gwen and Adam's relationship. Gwen told about the fight she and her mom had before the show. They left Iris alone on Christmas Eve and went to Java. Will asked her if there was anything more to the relationship with his brother. She almost 'fessed up, but just told of how nicer Adam was now.
Across the hall at the dorm, Adam tried to convince Casey to tell their parents about his gambling problem. Margo walked in and asked what they were talking about. Casey lied and said it was a secret concerning her present. She wanted to know what they wanted from Craig. They didn't want anything from him, but folded. Margo headed out. Casey got a reprise until after Christmas. Adam went to Java and ran into Will and Gwen. Will told him that Gwen had told him all about Los Angeles. Adam realized he wasn't told about the kiss. Will and Gwen leave for dinner at the Hughes'.
Craig bumped into Meg out shopping. Craig tried for sympathy, but Meg just reminded him of all his misdeeds. Margo came up and Meg left. They shopped for the boys. Craig asked her about Lucy and Johnny. Margo had no information, but tried to give him some encouragement and hope.
Paul crashed his car into some trees. He was knocked out in the driver's seat. A mysterious, cloaked figure with a mask on its face walked up to the car. The figure asked if he was OK. It wanted Paul to join it at the "party" in the "light." Paul wanted to know who it was; was it his father? The figure said to take the mask off. It was Craig's smiling face. Then, Meg happened by and ran up to the crashed car. She saw an unconscious Paul. She checked him out and said he was gone.
Carly walked into the Lakeview after talking to Jack about Simon. Simon produced two tickets to Hawaii. Carly said she couldn't go and had to break things off with him. She told him about the Prince being in town looking for the thief. She also told him Jack knew. Simon didn't want to hear it. They reminisced about their affair. They kissed and said their goodbyes. Carly went to get the kids and take them out to the farm.
Henry saw Katie out shopping. Henry informed her about Adolpho being in town to look for the criminal. Katie got all excited and wanted to go find Jack. Henry reminded her it was Christmas. Katie just said she'd take her fruitcake out to the farm and see if Jack was there. They exchanged holiday hugs and Katie set off.
Mike helped Emma with something at the farm, and she invited him to stay. Vienna showed up and gave Mike a big hug. She told him Adolpho dumped her and then smelled something from the kitchen. It was Emma's Swedish grandmother's recipe. Vienna then showed Emma how to cook another Swedish treat, a recipe Emma had lost. Later Vienna feigned homesickness and homelessness, and Emma invited her to stay as long as she liked. Emma left. Mike called Vienna out on tricking an invitation from Emma. Mike helped her in the kitchen. Vienna hugged him and Katie walked in. The ladies threw insults at each other. Emma came down and dragged Vienna off so Katie and Mike could have time alone, after inviting Katie to stay and wait for Jack. They talked about past Christmas memories. Katie asked for one more Christmas together. Before he could answer, Vienna came down in a skimpy Swedish outfit and hugged Mike again.
Outside, Jack found Carly waiting on the kids. Carly told him she left Simon. Jack said it was for the best and asked her to stay for the celebration.
Henry sits down next to Simon at the Lakeview bar; Simon isn't happy to see him, but they end up toasting each other a Merry Christmas. When Henry finds out that Simon isn't with Carly anymore, he tells Simon he ought to change his pattern with women by staying this time and fighting for the woman he loves instead of letting her go for some supposedly noble reason. Simon says maybe he's right, because there's no evidence of any crime, and he can go try to convince Carly there's nothing for her to be afraid of. He thanks Henry and leaves more than enough money for Henry's drinks before leaving.
Carly and Jack walk into Emma's kitchen only to find Mike, Vienna, and Katie already there. Carly turns to leave, but Jack convinces her that for the sake of the kids, she needs to be there tonight. However, he has to leave to meet the kids and pick up their present for Carly, so he asks her to wait at Emma's for half an hour. Carly says she'd rather wait at home, but Jack thinks that means she wants to go find Simon; Carly tells him that although it wasn't easy and it hurts, she did what he asked and told Simon goodbye, and she asks Jack to please not go after Simon anymore.
Inside, Emma comes into the kitchen and asks Mike for help putting together some toys for the kids; after Mike leaves, she invites Katie to join them for dinner if it's not too awkward for her. Katie says she'll ask Mike how he feels about that and thanks Emma. Emma leaves, and Vienna tells Katie that although she really likes how determinedly she's going after Simon to have him arrested, she thinks Katie needs to wake up and hear Mike when he says he doesn't want her around any longer, and she suggests that Katie leave with dignity. Katie says she's not like Vienna, going from man to man, and Vienna asks if Katie is calling her a slut; Katie says she would have said "hoochie," and Vienna attacks her. They get into a girl fight and end up breaking a special Christmas plate of Emma's and tearing the dress Vienna is wearing, which once belonged to Emma's grandmother. Carly walks in on their cat fight and is horrified to see what they've done, but instead of feeling bad about it, Katie and Vienna both blame Carly for what has happened, saying she should never have stolen Simon or the diamonds. Carly says she's leaving, but Katie grabs her, demanding to know where the diamond is; when Carly tells her she doesn't know and doesn't care, Katie shakes her, and Carly tells her not to mess with her or she'll be sorry. As Katie and Carly shout at one another and grapple with each other, Mike and Emma come back into the kitchen and break it up. Emma sees the broken plate, and Vienna tells Emma that Katie started fighting with her and tore Emma's grandmother's dress. Mike marches Katie out onto the porch, where he asks her what's going on. Katie says Vienna was baiting her, but when Mike asks what Carly did to provoke her, she says that Carly wouldn't tell her where the diamond is and was acting like she hadn't done anything wrong. She tells Mike she'll go back in and apologize to Emma, Carly, and even Vienna and offer to replace Emma's plate, but disgusted, Mike tells Katie that not everything that's broken can be fixed, and he tells her to leave.
At the shops in Old Town, Jack meets up with Parker and JJ (now being played by young teens/older tweenagers). Jack asks JJ to go get Sage, who is shopping with her friend Jill and her mom, so they can head to the farm, but he asks Parker to stay for a minute to talk. Once they're alone, Jack tells Parker that he wants to adopt him, like he's adopted JJ. Parker wants to know what's wrong, whether his mom is sick or in some kind of trouble, but Jack says it's nothing like that, he just wants to formalize his relationship with Parker. Parker says he doesn't want to be adopted, then he goes on to explain that he feels too old to be adopted and that he misses his dad; Jack says he understands that, and he tells Parker that he wouldn't have to change his last name from Munson. Parker says he thinks it might be awkward if Jack adopts him since he and Carly aren't married anymore, and if Carly then marries Simon or someone else down the road, he asks Jack how they would feel about it. Jack says he'll check with them to make sure it's okay but that anyone who loves Carly would want what's best for her kids, too.
Inside, Emma tells Carly that plates are replaceable but families aren't, and she thanks her for cleaning up and for being there, then leaves the kitchen. Vienna tells Carly she's not off the hook yet, and Carly figures out that Vienna wants Mike. When Vienna tells Carly she should give Simon up, Carly tells Vienna that Simon's not her boyfriend and never will be again; Jack, who has just come up to the porch, overhears this exchange and walks in, telling Carly the kids are outside and are ready for their hike. Carly goes outside with Jack and the kids, who tell them that the best present is the one they have tonight: they are all together. Sage says she wishes it could be like this all the time. Inside, Vienna hugs Mike, telling him that at least they have each other. It begins to snow, and Vienna asks Mike if he likes snow; remembering the snow angels he and Katie made in previous winters, Mike says he's always liked snow. Outside, Carly's cell phone rings, but when Carly flips open the phone and sees it's Simon's number, she hangs up without answering, telling the kids it's no one important.
Meg finds Paul, unconscious and not breathing after his car wreck. She drags him out of his car and performs CPR until the paramedics arrive and shock him; they take him to the hospital, where they have to shock him again just as Barbara arrives with Gwen and Will. Paul is in a limbo state, where he spies a young girl with long red hair outside a cottage that is called "Hotel Suisse." The girl goes inside, so Paul follows, finding Emily inside, but neither of them recognizes the other. When Paul tells Emily he saw the young girl, Emily is surprised that he saw her, too, but she tells him the girl is her daughter Jennifer, and she's gone for good. Emily leaves, and Gwen and Will come in, but they and Paul don't recognize each other, either. Paul says he needs to find a train or plane or bus to go home, but he doesn't know where home is. Barbara comes in, and Paul says he recognizes her, that she's his mother, but she says she only has two sons, and one of them is Will and the other is Dusty, who is now sitting on the couch. Barbara praises Dusty for being such a good son, and Dusty asks Paul if he'd like to play a game; taking out a revolver, Dusty empties most of the chambers and tells Paul the odds are in his favor if he plays. Paul puts the gun to his head but can't bring himself to pull the trigger, saying he has too much to live for. He sees the red-haired girl again outside, but when he tries to open the door, it's stuck; he yells for someone to help him, but no one hears him. Suddenly, the door opens, and Craig comes in, carrying Meg. They tell Paul they're looking for Emily so they can get the honeymoon suite, but Paul looks at Meg and says he remembers her, and he thinks that he loves her. Craig says if he loved Meg, he'd know it, not just think it. As they leave, Craig tells Paul to be sure to "obey the rules." Paul asks what the rules are, but no one answers him. Gwen and Will leave, also telling Paul to obey the rules. Barbara asks him if he has family who can help him, and Paul says he doesn't think there's anyone who can help him. Then, he sees Jennifer again briefly and tries to follow her, crying out for her to come back. Meg comes outside and hugs Paul, who tells her, "She's gone, and she's not coming back!" Meg says, "Come back, come back, come back," as Paul, in the hospital, awakens and sees the real Meg, Barbara, Gwen, and Will gathered around his bedside.