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Sharon and her family celebrated her memory breakthrough by decorating the cottage for Christmas, and they agreed to postpone telling Daniel and his clan about the new development until after the holidays. Phyllis was livid when she overheard Michael and Lauren discussing new evidence that could exonerate Sharon in Heather’s murder case. Phyllis confronted Sharon, who blurted out that she hadn’t killed Heather. Chance agreed to reopen the murder investigation. After a talk with Nick, Daniel demanded to hear an explanation from Sharon. Sharon warned Daniel that the real killer could still be a threat. Billy tried to convince Phyllis to let go of her desire to seek vengeance against Sharon and instead focus on their plan to take Victor down, but Phyllis opted to focus on Daniel. Ian eavesdropped on Phyllis ranting to Billy about Sharon. Ian hatched a plan to use Phyllis in the next phase of his scheme. Claire presented Victor and Nikki with a family portrait that she’d commissioned as a holiday gift. Claire was thrilled when her grandparents gave her a horse for Christmas. Victor surprised Cole by accepting Cole and Victoria’s relationship and welcoming Cole into the family. Victor offered Cole a job running Newman’s publishing division. Diane attempted to make amends with Ashley and Traci, and Ashley agreed to keep things civil over the holidays. Jack urged Kyle not to lose time with Diane the way Jack had with Dina. Kyle was touched when Diane gifted him with a co-CEO nameplate and the Christmas journal entries that she’d written during the time they’d been apart. Jack gave Diane a necklace made with jewels from the Teardrop of Love. Chance and Summer remained unsure of their future together, but they agreed to have dinner sometime. Victor appealed to Chelsea to reunite her family by reconciling with Adam, but she vowed that it would never happen. After Connor became excited about the idea of living on the ranch, Adam accepted Victor’s invitation to move into the old Newman home after the first of the year. Adam insisted that what had happened between him and Chelsea in Baltimore had meant something, and he proposed that Chelsea move in with him. Denise informed Nate and Amy that Damian’s numerous changes of address and employment were all linked to the same management and investment companies. Doubting it was coincidental, Nate planned to pretend to recruit Damian to work for Winters.
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