Dusty reveals to Emily that he's booked them a trip to Bermuda, and they head off to pack for the trip. Meanwhile, Lance tries to expose Alison's past, but Aaron tells him he already knows. Later, Lance sneaks back in and plants a tape on the TV. Alison is stunned to see Aaron watching a tape of her with Dusty. Alison explains to Aaron that Emily and Dusty weren't together when Alison slept with Dusty, and begs Aaron to forget about this. As Aaron is leaving, happy Emily and Dusty arrive, and Dusty demands to know what's going on. Gwen is handed a taped-together page from Cleo's diary. Believing Jade off the evidence of the diary, Gwen calls Will to warn him. Meanwhile, Cleo is apologetic as she ties up unconscious Will. Later, Cleo comes back and promises to take Gwen to Will. Instead, Gwen spots Jade, whom Cleo has tied to the tracks. Cleo knocks Gwen out ties her up as well. Cleo runs off, Gwen and Jade stop their arguing and work together, as an oncoming train approaches. Meanwhile, Luke's completely thrown when he finds Maddie and Noah in bed together. Noah thinks Luke's jealous because he has a thing for Maddie, but Luke informs Noah that he's gay. Surprised Noah says it doesn't matter to him. Later, Maddie finds Will and unties him, but he's concerned about where Cleo is. Cleo dresses as Gwen to get the cops off her trail. As Cleo tries to escape, Gabe arrives to escort "Gwen" to the stage for her duet with Andy Williams.
Dusty and Emily want to know what all the tension is about. Emily's becoming more unnerved, and suspects it has something to do with one of Alison's movies. She grabs the remote, turns on the TV, and is shocked to see Dusty and Alison making love. Emily rushes out and Dusty tries to reason with her, but it has changed everything. Alison realizes that Aaron can't forgive her, and is resentful that she ruined her sister's happiness. Gabe's pushing "Gwen" toward the stage, but desperate Cleo claims laryngitis and asks if she can lip synch. Cleo starts to lip-synch, but Luke and Noah sense that something's off. Will sees "Gwen" and realizes it's Cleo. Noah, Luke and Will give chase while Maddie calls the cops. Desperate Will tries to connect with Cleo emotionally to get her to tell him where Gwen is. Meanwhile, Gwen and Jade struggle to get loose. Jade gets loose of her ropes, but the ropes holding Gwen are too tight to untie. As the train gets closer, Jade sees approaching Will and urges him to hurry. Will cuts the rope with his knife, and they head back to theater. Gwen takes the stage, and in the shadow of Gwen's greatest success, Cleo is led off to jail.
Aaron arrives at the Lakeview and informs the manager that he will not be taking the job as the new bartender. Holden overhears Aaron quitting and telling the manager he is leaving town and questions his decisions. Holden and Aaron head to Al's to talk and Aaron tells his dad that he can't tell him why, but he realizes now that things with him and Ali are not going to work out. Aaron tells him he is going back to Seattle because his real reason for returning to Oakdale was to get Alison back and now that he is done with her he can't be near her. Holden tries to prove to Aaron that it is best for him to stay in town where he has his family. Aaron agrees to think about it and heads out. He arrives at the Lakeview and accepts the job with the manager. Once there he is greeted by Dusty who asks to talk, but Aaron shoots him down and tells him to stay away from him.
In Old Town, Dusty continues to beg Emily to forgive him for sleeping with Alison and tries to convince her to go away with him so he can prove to her that he wants to be with her. Emily grills Dusty about what happened with Alison and why it was so easy to sleep with Alison, a former porn star, but so hard to date her, a former call girl. Dusty tries to explain that he can't lose her and everything with Alison was just out of loneliness and being needed, but she refuses to believe him and heads home.
At her home, Alison recalls her recent happiness with Aaron and begins to cry as Susan comes in and tries to find out what is upsetting her. Susan attempts to reassures Alison that Aaron wants her back and tells Alison she will talk to Aaron and try to explain things, but Alison tells her mother not to talk with him; this was her fault. Alison explains to her mom about sleeping with Dusty in Vegas and Susan admits this revelation makes her sad for all of them and what they have lost. Emily arrives home and simply asks her sister why. Alison tries to explain and apologize, but Emily tells her she can't be around either her or Dusty and walks out.
As Jack and Katie dry off and reflect on their skinny dipping adventure, Katie tells Jack about her earlier run-in with Carly. She admits to telling Carly that she wouldn't break her and Jack up and that she told Carly she was onto her plan. Jack tells Katie that he isn't upset with her because he trusts her and knows that if she makes a mistake she will come to him to tell him and not try to hide her mistakes. Jack explains to Katie that he believes the plan to break them up is really Brad's work, not Carly's. The two go over their ideas about Brad and Carly and agree not to worry about them anymore and set a date for the following night since Jack has Sage tonight. Katie leaves the farm and decides to confront Brad about trying to ruin her relationship and calls him to meet her.
Brad arrives at Carly's home and tries to help her with her plan to get Jack back. Brad stumbles on an idea to break Jack and Katie up and explains they need to stop focusing on making Jack jealous and set their sites on making Katie realize her relationship with Jack is on "shaky ground". Brad explains that if they convince Katie that Jack has cold feet and doesn't want to move forward with her they will break up. As Brad is persuading Carly to play along, Katie calls and asks to meet him at the station and he agrees.
Carly arrives at the farm and apologizes to Jack about everything that happened with Brad and agrees with him that she should have nothing to do with Brad. As part of her plan with Brad, Carly asks Jack if she can take Sage for the night giving Jack time with Katie. Jack questions Carly's motives, but she convinces him that she is just trying to set up a favor bank for the future with him and the kids. In reality, she is trying to get Jack to call up Katie and get the plan moving to break the two lovebirds up. Jack falls for it and calls Katie to invite her on "a night to remember".
Meanwhile at the station, Katie goes over some ideas with Brad and finds out from him that he and Carly have called it quits. As the two discuss ideas, Brad's plan goes into action when he gets a pretend phone call from a jeweler about a ring. Making sure Katie can hear, Brad tells the jeweler he had the wrong Snyder that they must be looking for Jack. Katie is stunned by what she hears and when Brad leaves the room she grabs his phone and hits call return. She finds out the number is an actual jeweler and begins to ask questions when Brad returns and demands to know what she is doing with his phone. She tells him she is sorry, but she wanted to know what the call was about. Katie admits to Brad that she thinks the call from the jeweler was about Jack giving her an engagement ring.
Emma comforts a guilty Meg, but she can't take it and leaves. Holden and Lily show up and convince her to come to their house, but Meg ditches them. Holden and Lily must break the bad news about Paul to Faith. Craig confides in Margo about Meg, and later promises Meg she can find peace with him at Fairwinds. Jack drops off Sage at Carly's house, and Carly is extremely generous about his date with Katie. Carly admits to Lily she's changed tactics and is working with Brad another way. Sage nails Carly about wanting to checkup on Jack and Katie, and wants to help. Anxious Katie is ready to be proposed to, but Jack has no intention of doing so. Sage calls Jack to come help her, and Katie goes to work and laments to Brad. Brad takes the opportunity to plant more doubts. Brad calls Carly to say mission accomplished, as Jack is there with her and Sage. At the Old Town fair, Parker, JJ and Faith run into each other. With Faith not speaking to Parker, Morgan wonders why. He lies that he doesn't know and doesn't care. Parker works at getting silent Faith to open up. She almost does until Morgan shows up and she shuts down again.
At Fairwinds, Meg comes downstairs after spending the night in Craig's guest room. Craig gives her another copy of the contract that gives Montgomery Enterprises to her, because she tore up the first contract. Meg asks why Craig would want her to keep the company now, and he says he's trying to do what she taught him to do --- something unselfish. When she asks what she's supposed to do with the company, he says, "Whatever you planned to do with it before." She thinks this is a trap to keep her tied to him, but even though he denies it, she storms off to pack her things to leave. Barbara arrives and tries to give Craig a check for the money he spent in the search for Paul, saying she's called off the search now and doesn't want Craig to ease his conscience by using his money. Craig doesn't want to take the check, and he tells Barbara he tried to save Paul, not kill him, but she doesn't believe him. Barbara is stunned when Meg walks in, and Meg wants to know if Barbara has good news about Paul. Barbara tells Meg that they are presuming that Paul is dead and that she has called off the search at this point. She also tells Meg she can't believe she's still married to Craig and living in his house, saying if Paul were alive, this is not what he would want to see. She tells Meg she should have listened to her and to Paul when they tried to tell her not to go through with her plan; Craig steps in and says if she wants to blame someone for what happened to Paul, she should blame him. Barbara says she does, but she thinks Meg is to blame, too. She leaves, saying, "Now the two of you can live happily ever after in your own private hell!" After Barbara leaves, Meg sits down and says she can't believe it, but Paul must really be dead if Barbara believes it. She breaks down a bit, and Craig tells her she can continue to stay at Fairwinds, but she says Barbara's just proven she can't hide there and that people will think they're still married, which they are. Craig asks if she wants an annulment, and she asks if he'll take back the company if she says yes. He shakes his head and says, "You can have the annulment and the company, and it is completely your choice," and he walks out of the room.
Dusty tries to reach Emily on her phone, but she's not answering. Susan walks up and warns Dusty to stay away from both of her girls. Dusty says he can't do that, because he thinks he and Emily are good for each other, and he's not going to give up on Emily. Meanwhile, at Susan's, Alison finds Emily packing and asks where she's going. Emily tells Alison she's going to pick up Daniel and take him to Europe for the summer because she needs to get as far away from Dusty and her as she can. Alison says she doesn't know what she'll do without Emily, but Emily tells her she'll have to take care of herself. Emily goes upstairs to get more things, and Susan comes in. Alison tells her mom about Emily's plans to leave with Daniel, saying she's afraid Emily might not ever come back. Emily walks in and tells Alison not to be so dramatic, and Susan tells Emily she thinks she's doing the right thing by taking some time to be with her son. Emily tells Alison to go ahead and go to work, and Alison says, "You have no idea how much I'll miss you," then leaves. She immediately calls Dusty and tells him that Emily is getting ready to leave the country. Susan and Emily say their goodbyes, and Emily tells Susan not to baby Alison. Susan leaves and goes to Al's to speak to Alison, who blames herself for what's happened. Susan says she can't blame herself entirely and that if Alison can stay honest, she'll stay sober. Alison says she's afraid that without Emily, she might not be able to do that, but Susan says she can lean on her.
When Emily goes to leave Susan's house, she opens the door and finds Dusty standing there. She tells him any chance they had is gone now. He asks if she's planning to come back, and she says she's not sure, except that she has to get Daniel back in time for school in the fall. She tells Dusty that she's told the Intruder staff that she's taking an indefinite leave of absence. She says that while she's gone, she'll be trying her hardest to forget all about Dusty, then she leaves.
Jack arrives at Carly's place to pick up Sage and calls Katie while Carly goes to get Sage. He invites Katie to dinner, but she turns him down and then brushes him off when he tries to make other plans with her, saying she's really busy at work right now. Carly comes downstairs and overhears part of the conversation. Jack leaves with Sage, and Lily arrives to talk to Carly, who tells her she thinks Katie and Jack are very close to breaking up because of Brad's plan. Lily warns her that Jack won't come back to her if he finds out she's involved in any plotting like that, but Carly is confident Brad will take the fall if Jack finds out about the phony engagement ring story. Lily then tells Carly the reason she's there is to tell Carly about Paul's death and to suggest that she and Jack tell Parker about it together, because she thinks Parker is going to really take it hard. Lily then gives Carly advice about Jack, telling her that she should let him come to her for a change, but that if she really wants him back, she needs to tell him she still loves him. She leaves, and Carly calls Jack, asking him to come over as soon as possible for something urgent. When Jack gets there, Carly tells him what Lily told her about Paul, and Jack says that Margo had told him about it, but now that it's about to become public knowledge, they do need to get together to tell Parker when he gets back from camp. He asks why she couldn't tell him that on the phone, and she invites him in for lunch, saying there's something else she has to tell him. When Carly tells Jack how sorry she is that she screwed up her "perfect life" by choosing Simon over him and hurting everyone she loved, he assumes she's talking about the kids and assures her that it appears they're all on the right path to getting past that. But Carly tells him there's something more, and she says, "I still love you, Jack; I never stopped."
Meanwhile, in Old Town, Katie runs into Vienna, who's carrying her new massage table to her car. Vienna asks Katie what's wrong, and Katie tells her the whole story about how she thought Jack was going to propose, but then he didn't. She tells Vienna about the phone call Brad got and how she called the number back and spoke to the jeweler herself; when Vienna hears it was the jeweler in Old Town, she says she knows him personally, and she can ask him what the story is about Jack's ring. Katie says she doesn't think that's necessary, and she goes back to WOAK. Brad brings coffee for her, and she tells him she's already over the false alarm about the engagement and thinks that perhaps she and Jack should take a little break from each other. He leaves to get something for work, and Vienna comes in and tells Katie she spoke to the jeweler, and he said Jack never ordered a ring and no one from his store made any calls trying to find Jack. When Katie says she picked up Brad's cell phone and called the store back herself, Vienna suggests they try that number again, since Brad has once again left his cell phone in the room. However, just as they pick up the phone, Brad walks back in and asks what Vienna's doing there. She tells him she's interested in advertising her new massage business on WOAK, and Katie suggests that Vienna give Brad a massage so he can vouch for her massages himself on their show. Vienna and Brad go off to the Lakeview so that Vienna can give him the massage, and Katie finds the number on Brad's cell phone and calls it; a man's answering machine picks up, and she realizes it must be one of Brad's friends, but she recognizes the voice as being the person she spoke to the night before. She goes to the Lakeview and walks into Vienna's room carrying a bucket of ice, which she proceeds to dump onto Brad's back as he lies on the massage table. Brad gets up, shocked, and Katie tells him she knows all about the phony jewelry store call and calls him a pig.