While looking for a coat to wear on the way out, Diane was startled to find Phyllis lurking in her closet. Phyllis, of course, taunts her, and told her she heard the entire conversation between Diane and Isabella. Caught completely off guard, told Phyllis that Isabella was a flake and that she wasn't an accomplice like Phyllis was implying. She called in her bodyguard, who was also surprised to see Phyllis, and called the police to come arrest Phyllis.
Once at the police station, Phyllis asked an officer what to expect. She told Phyllis she was going to have to stay in jail overnight and see the judge in the morning. She also told Phyllis that it was likely that her bail was going to be revoked as a result of the re-arrest.
John Silva met Jack at his office to further discuss the case. While Jack said he saw the best approach as showing Diane set Phyllis up, John told him a better one was to simply create a reasonable doubt. He also firmly warned Jack that he needed to help reign in Phyllis's behavior. He also told Jack he was very concerned about them pretending they were split up—he told him it was a bad idea. Right then, the phone rang, and it was Phyllis calling from the police station to tell them she had been arrested again. When they arrived, they were told she broke into Diane's hotel suite. Both very angry, Jack and John urged her to be quiet, but she didn't listen. She insisted on yelling and screaming about the new information she found out, and ended up being dragged away by several policemen.
Looking around at the ambience in Neil's apartment, Wes asked if he was interrupting Neil and Drucilla. When Neil asked why he was there, Wes told him Serena had paid him a visit, and he wanted to talk with Neil about it. Obviously looking for an excuse to get out of the situation, Dru left the men alone to talk. Nobody's fool, Wes looked around and commented on the china, flowers and candlelight, and Neil made an attempt to change the subject, by asking about Serena. When Wes explained she was interested in the two of them getting together, Neil asked if he had encouraged it. Wes told him he told her he felt the relationship was based on enabling, and therefore, she shouldn't get her hopes up. When he asked Neil if he was interested in her, he shot him down, telling him it was none of his business. Leaving that alone, Wes went on to tell Neil that he loved Dru and someday planned to marry her. He also warned Neil to be gentle with Serena, because she isn't as strong as she appeared to be.
Upstairs at Olivia's apartment, Lily began talking to Dru about what a great guy Wes was. Annoyed by all of the pushing, Dru tells Lily to mind her own business. The doorbell rang, and when Lily saw it was Wes, she quickly left. Wes directly asked Dru what was going on between her and Neil, and she denied any involvement with him, other than co-parenting. He asked if Neil was going to be in the picture, and she sweet-talked in into not being angry by telling him she didn't feel that way about Neil at the moment. He also confronted her about not being up front about going to see him, and she apologized. He left on a cordial note, telling her he wasn't afraid of a little bit of competition.
At the ranch, Nick was trying to help the children with their homework. Both of them gave him big attitude and it really upset Nick. After they left, he confronted Sharon, asking if they were treating her in the same way. Sharon told him the situation was tough on them, and he turned around and immediately blamed her for the way things were. He asked for her help in getting the children to understand what was going on. He urged her to take more of the blame for what was happening, and at first, she wasn't very receptive to that idea. She told him she was the one answering all of their questions and holding them at night when they cried, and taking more responsibility would likely make them hate her. He again asked her to help them relate to him better, and she relented. She asked if he would eat dinner with them, and when he said he wouldn't, she let it go.
Up at the main house, Cassie and Noah went to go visit Nikki, and they shocked her by asking if they could come up and live with her and Victor. They talked about what was happening with the family, and Nikki did her best to reassure them everything would be O.K. She also promised she would talk to Nick and Sharon about the living arrangements, and asked if they wanted to spend the weekend there. Meanwhile, Victor went to go see Sharon. He tried to reassure her as well, and even promised to talk to Nick for her. She ended up hugging him, telling him she didn't know what she would do without his support.
Jack and John met Phyllis in a private room at the police station, and neither were very happy with her. She insisted what she had to say was going to change everything and launched into her story. As she told them all of the details, they just looked at her, open-mouthed and unconvinced. After listening to her litany, John bluntly pointed out to Phyllis that she had absolutely no information that would help her case. Shocked, Phyllis began to protest, and Jack signaled to John behind her back not to bother arguing with her. With that, John begged Jack to reason with her, and turned around and left. Phyllis turned to Jack and told him they didn't need John, and Jack reminded her that now they were back at square one and she wasn't leaving jail any time soon. She began to cry and asked him if he had lost faith in her. On the contrary—he told her he loved her very much and still believed in her. When the guard walked in and took Phyllis away, Jack looked absolutely distraught.
Diane went over to Isabella's and had a conversation full of innuendoes and implications. Diane blasted her for giving Phyllis so much ammunition, albeit inadvertently, but still very damaging. Isabella told her she had nothing to do with the situation, and pointed out that Diane sounded like she was feeling guilty. Diane stated that she was not guilty, nor was Isabella; that Phyllis was the one who was the criminal. Isabella asked Diane what she wanted from her, and Diane told her to just keep her mouth shut and not to discuss the situation with anyone. Isabella gave her a wicked look and told her she had a beautiful husband and family that she had no intention of jeopardizing for Diane. With that, she told Diane to leave, which she promptly did. Soon after Diane left, there was another knock at Isabella's door. This time, it was Jack, who told her he had no intention of leaving until he talked with her.
Jill came into the living room at the estate, surprised to find Larry there. He told her he was sorry for what he did, and would she consider giving him his job back? She huffed and puffed at him, telling him what he did was humiliating and she had no intention of re-hiring him. To further put him in his place, she said there were a couple of things wrong with her car, and she wanted him to fix them, which really infuriated him. He told her he only fixed Mrs. Chancellor's cars, not hers, and stomped out of the room. Neither one of them realized Katherine was eavesdropping on the entire conversation until she came into the room to goad Jill. She urged Jill to consider the fact that she and Larry weren't really all that different from one another—after all, she used to just be her manicurist. To Jill's aggravation, she went on to tell her she should consider hiring Larry back.
Larry ended up going to the coffee house and ran into Michael Baldwin. When Larry noticed his bruised face, Michael warned him not to give him any more advice. Larry started venting about the situation with his lover and work, and Michael put two and two together and figured out they were talking about Jill. As Larry gave him more details about the situation, it was obvious the wheels in Michael's head were turning. When Larry took a moment to pause, he asked Michael what was on his mind. Michael told him he felt he might have a sexual harassment case.
In their motel room, Vicki and Diego were looking through apartment magazines. As Vicki was walking out the door to go to work, the phone when it rang and Diego was surprised to hear Victor asking him why he was still in Genoa City. He practically ordered Diego out of town, and finally, Diego just hung up the phone on him. Afterward, he started playing with the money Victor left.
Later on, he met Raul at a restaurant and they talked while waiting for their parents to arrive to celebrate their anniversary. Their parents arrived, and began asking both of them what was going on in their lives. The conversation swung to the family finances, and it was clear they were really struggling financially. Diego voiced a great deal of concern, and began to get really upset about their financial situation. After their parents left to go to the movies—the only form of celebration they said they could afford—Raul laid into Diego for spoiling their anniversary. With that, Diego told Raul there was something he had to tell him.
Victoria went to meet her dad in his office and was surprised to find Nicholas there as well. They began to argue, supposedly about business, but it turned personal. Nicholas told her Diego was using her and when she pointed out that Sharon was as much to blame, Victor walked in, asking if everything was all right. Victoria told him everything was fine, and then turned on her heel and left. Victor ordered Nicholas to bury his differences with Victoria, and assured him he had the situation under control. With that, he changed the subject and told Nicholas he wanted to talk about Sharon. Ignoring Nicholas's protestations, he strongly urged Nicholas to try to forgive Sharon, mostly because the situation was so painful for the children. He also reminded Nicholas of his affair with Grace, and that both he and Sharon had some healing to do. He ended the conversation by telling Nicholas not to let the situation ruin his family—he should stay with Sharon for the children's sake.
Meanwhile at Sharon's, Nikki came by to give Sharon a big piece of her mind. She told her of their request to live with them, and Sharon was shocked and hurt to hear the news. She also berated Sharon for leading the children to believe the separation was Nicholas's fault, which Sharon vehemently denied. Not believing her, Nikki, getting more livid by the minute, told her she was tired of the children blaming Nicholas. Before she left, she gave Sharon an ultimatum: either tell the children she was to blame, or Nikki would. With that, she stormed out of the house, leaving Sharon was totally floored and speechless.
Jack wondered why Isabella was visibly nervous when he questioned her about any information she had on his wife or Diane. When she reacted defensively, saying she was Diane's friend and didn't intend to discuss her with Jack, he took a different approach, saying he was only trying to get at the truth for Kyle's sake. Isabella seemed to be affected by his words, but before she could tell him anything, his cell phone rang and John Silva asked him to come to Gina's so they could talk immediately. Isabella then asked him to leave, restating her loyalty to Diane and saying she had no information to give him. After Jack was gone, Isabella muttered a sarcastic thanks to Diane for getting her involved in the situation.
Diane saw Ashley working alone at a table in Gina's and asked if she could sit down. Ashley told her she was just leaving, but Diane sat down anyway, saying she wanted to talk about Kyle. When Ashley became agitated, Diane said she knew it was because of the circumstances of Kyle's birth, including her attempt to steal Victor's sperm to get pregnant. Ashley again tried to leave, but Diane reminded her that Kyle and Abby were cousins. She thought it was time for the two of them to start getting to know each other. Ashley said that Abby had a very busy schedule and the two children were too young to understand that they were related. When Diane continued to push, Ashley snapped that she didn't want Diane in her home, her life, and especially nowhere near her daughter. While Kyle was, in fact, an Abbott and welcome in their family's home, Diane certainly was not.
Jack met John Silva at Gina's and found out the trial date was only a week away. John dismissed Jack's contention that he had been on the verge of making Isabella admit something. He warned him that he was in danger of jeopardizing Phyllis's case, and she only had a fifty-fifty chance as it was. When the two rose to leave, Jack saw Diane and Ashley sitting across the restaurant. John warned him to stay away from Diane. But after John left, Jack approached the two women. Diane asked if his ears were burning, and explained that she'd been trying to set up a play date for Kyle and Abby. Ashley listened, horrified, as Jack revealed that Phyllis was now in jail, and he'd begun to have his doubts about her innocence and didn't blame Diane for any of this. Not knowing about the game Jack was playing with Diane, Ashley looked dazed as she left, glancing back to see Jack sit down at the table with Diane.
Victoria went to see Olivia and catch her up on the current situation with Diego. Olivia was visibly worried to hear that Diego had, in fact, been involved with Sharon, but Victoria blamed Sharon for pursuing him and said Diego had made a single error in judgment. She was sorry for the mess Sharon had made of her marriage, and she regretted that Nick was being hurt by it, but she couldn't give up the man she loved for her family. When she told Olivia how she woke up each day excited in a way she hadn't been in a long time, Olivia softened and wished her happiness.
At Gina's, Diego finally broke down and told Raul the truth. He intended to leave town so that he wouldn't be the reason Victoria was estranged from her family, because he was sure it would break her heart. He explained about Victor's attempt to buy him off, finally confessing that the Newmans hated him because he'd had sex with Sharon. Though Raul was shocked, he heard Diego out when Diego insisted that Raul take the money and give it to their parents to pay off the house and help them have a more comfortable life. Raul refused, ordering Diego to hand the money back to Victor and tell him no thanks, then go on and live a good life with the woman he loved. He said that's what Victoria would want, and in time, the Newmans would come to see that he was a good man. Diego thanked him, saying he'd needed to hear what Raul had to say. He intended to do just that.
Later, Raul went to Crimson Lights, where he ran into Victoria, who was there waiting for Diego. Raul asked if they were doing anything special, then grinned when Victoria glowingly said Diego made everything they did special. She thought she must be a little early, though, since Diego wasn't there yet.
Also at Crimson Lights, Michael talked to Larry about the merits of filing a sexual harassment suit against Jill and Jabot. Larry scoffed at the idea, saying women didn't harass men. Men harassed women. Michael told him that men, too, could be harassed, and if Larry was properly coached on his testimony, he would have a good case. When Larry asked if that meant lying, Michael insisted that Larry would be telling the truth. Larry said no thanks, he didn't want to file suit. Michael gave him his business card in case he changed his mind.
Diego was hurrying along, carrying the bag of Victor's money, when he was mugged at gunpoint by two guys. Frustrated to find only five dollars in his wallet, they asked what was in the bag. Diego told them it was just dirty laundry and he had places to be. One of the guys grabbed the bag and found the hundred thousand dollars. Diego warned them that they didn't want to mess with the people the money belonged to, but the two men brutally beat him, then left him behind a dumpster when they ran off with the money.
Jill and Frederick Hodges toasted their business agreement in her office. She expressed her gratitude for the way he'd behaved after witnessing Larry's outburst the week before. Frederick said that he wasn't passing judgment, smirking inside, or thinking less of her. In fact, he told her she needed to be a little cautious of those who would take advantage of her position. He relayed the story of a secretary at his bank who often flirted with him, and how he never took part in her suggestive conversations because it could lead to problems in the workplace. He said it was dangerous to give in to vanity. When Jill reminded him that he was also married, Frederick said that Anita sometimes made it easy for him to forget that they were married. In any case, he thought it would be prudent of Jill to persuade Katherine to get Larry off the estate, as well. Jill agreed that workplace relationships were a bad idea, obviously thinking of Sean. She then walked Frederick out, saying she had another appointment. When she arrived home to find Warton there, she tried to avoid a conversation with him, but he said he could either yell at her, or she could calmly talk to him. He reminded her that he was on probation and needed a job other than just working for Mrs. Chancellor. At first Jill flatly refused, saying it was Jabot's policy never to give recommendations when someone had been fired for cause. Then she relented, saying if he would stop working for Katherine and move off of the Chancellor estate, where she'd never have to see him again, she would write him a recommendation so glowing every company within a hundred miles would hire him to mop out their toilets. After she walked upstairs, Larry called the number on the card Michael Baldwin had given him and left a message. He'd changed his mind; he wanted to file suit.
Nikki told Victor about the grandchildren wanting to move in with them. The thing that she was the most upset about was that the kids blamed their father for leaving. Victor was sure that Nicholas would have to come back home to be there for his kids.
The other thing they discussed was the relationship between Diego and Victoria. Victor was sure that Diego was long gone, but wouldn't tell Nikki what he had done to assure this. She was worried about the affect that it would have on Victoria.
Victoria talked to Raul about his brother at Crimson Lights. Sharon entered the coffeehouse, so Victoria excused herself and insisted on knowing what Sharon was doing there. She taunted Sharon a bit, then left to find Diego so that they could look at that apartment. On her way out, a bum approached her asking for help. Someone was sleeping by his dumpster, and he wanted them to leave. Little did she know that the person sleeping was Diego. She ignored the man and drove off. . .
Jack and Diane continued their conversation at Gina's. He encouraged her to be honest with him if she hoped for any chance that they would be together someday. She ended up admitting that she staged the car accident, but didn't bargain for the broken leg. She left sheepishly -- Jack thanked her for telling him.
After Ashley saw Jack and Diane talking, she rushed to the jail to visit Phyllis. She was so dead set against Diane worming her way into Jack's life, and saw how upset Jack was with Phyllis. She encouraged Phyllis to attempt plea bargaining to cut her losses. Phyllis filled Ashley in on the true situation and the things that she had heard Diane say. Ashley was glad to know the truth, and offered her support for the future.
Jack rushed to the jail after leaving Gina's. He had to tell Phyllis about the new trial date, which upset her tremendously. Soon she was agonizing over the lack of time and wondering who could confirm their suspicions. Then Jack let her know that Diane had confessed to him. They both wondered what to do next, then they knew -- the worst possible thing would be the only thing that would keep Diane from leaving town with Kyle over the next few weeks. Neither could say it out loud, but they both knew what it would have to be.
Brittany and Raul talked at the coffeehouse about Victoria and Diego. At first, Brittany didn't see what the big deal was -- then Raul told her about the money that Victor offered her brother to leave town. She acted like he should keep the money, how great it would be. But Raul was worried about Diego because Victoria hadn't been able to find him yet. He was worried that his brother had run away. Brittany had to leave him to go work at the shelter.
Nick told his mother that he wasn't sure what he wanted. It was killing him to make his kids suffer so much, but he couldn't stand to be around Sharon right now. He worried that the kids blamed him for everything. Nikki said that was natural, since he was the one who moved out. She was upset to hear that Nick was staying at his office and showering at the gym. She wondered if perhaps it wouldn't be better for him to be at home. He said that was what Victor wanted, but he was afraid if he didn't keep some space between Sharon and him, it would be the end of their marriage.
Victor reassured Sharon that she should be patient and not expect too much from Nick too fast. He said that Nick loved his children so much and didn't want to put them through what he'd suffered when his parents divorced. He also said there was always hope for their marriage; after all, he and Nikki had managed to reconcile their past mistakes and pain and be together again. Sharon thanked Victor for always being so supportive of her. As he told the kids good-bye, Nick came in and said he wanted to talk to the children alone. Victor left, and Sharon sat down with the kids for a few minutes, assuring them that their father was a good man who loved them very much. She wanted them to listen to what he had to say. She then followed Victor to the main house. Alone with Cassie and Noah, Nick assured them of his love. He said he was just very angry, and it was best if he wasn't there. But that didn't mean he didn't love them. Both children cried in his arms, wondering why it had to be that way.
The homeless man led a policeman behind the dumpster where Diego was unconscious. He was hospitalized with severe injuries, without identification, while his cell phone, which had slid under the dumpster during the mugging, rang unanswered as Victoria tried to reach him. When she arrived back at their motel room, bewildered because he hadn't met her at Crimson Lights, she realized his clothes were no longer in the closet. Raul came over because Cody told him that Diego had never shown up. When Victoria frantically speculated on where Diego had gone, she asked if he'd said anything at their parents' anniversary dinner. She thought maybe his parents didn't want Diego to be with her. Raul was angry and said it wasn't his family who was causing problems. Victoria then figured out that Raul knew something and began questioning him. Raul finally told her the entire story of how her father had given Diego a hundred thousand dollars to leave town. Diego had considered it briefly, to help his parents with their financial problems, but ultimately had decided to return the money to Victor and stay with the woman he loved. Victoria didn't know whether to believe him, but she was so furious with her father that she called Victor. She told him he'd gotten what he wanted; Diego was gone. She told him to stay where he was. She was on her way over to talk to him.
John Silva told Phyllis and Jack that the car incident, in which Diane had deliberately been run over by Phyllis, would not help their case any. No criminal charges had been filed. He also said there was no reason Diane had to stay in town during the trial. She only had to be in court when she was subpoenaed. He warned Jack to stay away from Diane, or he could end up damaging Phyllis's case even more. After he left them alone, Phyllis told Jack she didn't feel they had any choice. The only way he was going to get information out of Diane was if she felt close enough to trust him. She said she'd never ask any questions. Jack said the thought of being with Diane made him sick. But once Phyllis told him she thought she would die if she had to go to prison, he left, feeling he had no choice but to follow through with the plan.
Isabella went to see Diane, infuriated by the position she felt her friendship with Diane had placed her in. She told Diane that if she had to endure one more visit or threat, she would talk. Diane reassured her, reminding her that Phyllis was in jail, Jack was growing closer to Diane, and they had nothing to hide. Isabella said she wasn't so sure about that. Diane was shocked that Isabella was beginning to doubt her. She told her that she'd already told Jack how the car accident had happened, admitting that she'd been to blame. Instead of being angry with her, Jack understood the desperation that drove her to such lengths. So Isabella had nothing to worry about. While they were talking, Jack called and asked to see her. After Isabella left, Diane dressed in sexy lingerie and met him at the door. She told him that Kyle was already asleep. Jack said he wasn't there to see Kyle, but her. Diane then kissed him, while Jack rolled his eyes with disgust that he was actually doing this in the hope of getting information from her.