Joey is in her 2nd month at Worthington University where she is struggling in her beginners writing class taught by Professor David Wilder who criticizes her first essay about her and Dawson. Audrey Liddell, Joey's brash new roommate from Beverly Hills, proves to be more of an annoyance than a friend with her wild and crazy personality. Dawson, who's continuing his studies at USC with an internship in Hollywood, begins his job on a shaky start when he meets Todd Carr, an arrogant, egocentric, hack film director who gives Dawson a hard time. Meanwhile, Jen pays Pacey a visit, who's lying low as he docks his yacht in Boston Harbor after sailing away the summer. At nearby Boston Bay College, Jen and Jack are invited to their first fraternity party. They persuade Joey to come along with Audrey who seems to get along with Jen and Jack, much to Joey's surprise. Also, Jen meets Charlie, a bass player. She is rude to him, insulting him away, but deep inside feels strongly attracted to him.

Summer is upon the gang and so they move on with their lives to follow their own plans. Joey, back at Capeside, returns to her job as a waitress at the Yacht Club; Pacey gets a new job there as a security guard and runs into Danny Brecher whom has left his wife; Dawson and Audrey are on their way to L.A.; and Jack and Jen to Costa Rica. But a few things change everybody's plans when their flights are delayed. Bessie tells Joey they got an answer from the scholarship Joey thought of applying in France (which Bessie secretly sent in without Joey's knowledge). Also Grams decides to go to Las Vegas with Clifton. Jack meets Eric at the airport, who was just coming back from his hometown where he tried coming out to his parents. Jen tells Jack to go help Eric, as she'll go help herself by going to meet her parents.

During the summer, Pacey and Audrey rocked Los Angeles and spent time with her next door neighbors, the Osbournes, and Jack Osbourne even tags along with them to interview at Worthington. Jen spent her time in New York and got ecstatic to learn her parents are separating. Jack got dumped by Eric, but got over it. Joey spent her summer in Capeside doing a lot of reading, working and romancing. On their first week back at Boston Bay College, Jen is shocked to run into find that Grams Ryan has decided to go back to school. At Worthington, Joey experiences nothing but bad luck when she decides to enroll in an intermediate writing class taught by the liberal, but manipulative and cynical, Professor Greg Heston who does not hesitate to ridicule and embarrass Joey in front of the class with her lack of knowledge of the current book topic. Pacey and Jack move out of Grams' house and Pacey tries to get the perfect apartment, owned by a feisty, punk rock British woman, named Emma Jones, who works as a waitress in the local bar Hell's Kitchen. Also, Dawson is working on a new movie, a horror film titled "Wicked Dead" with him as the assistant director and the hack Todd Carr as director. When he finally gets together with Joey, he is the only one to have remembered her 20th birthday.

After spending their first romantic night together, Dawson and Joey decide not to discuss it, because every time something happened between them they always ruined it by over discussing it. Dawson even shows Joey the set that he's working on which resembles his own house in Capeside. Meanwhile, Pacey starts on his new job as a stock broker which was set up by Audrey's father and during Pacey's first day he deals with his ambitious, but oily and pig-headed boss Rich Rinaldi. At the same time, Jack finally gets himself and Pacey the dream apartment Pacey was chasing so hard to get, with a little deviousness against Emma. During a heated argument with Grams, Jen accidentally meets a very cute guy, named C.J., a fan of Jen's defunct radio show who invites her to a counseling center that he works at. Also, Joey is hired as a waitress as the local bar, Hell's Kitchen, to get some extra cash for herself.

Joey's worst nightmare comes true when she accidentally sends a very personal e-mail she wrote for Dawson to the entire student body. The next morning, Joey's e-mail is the topic of virtually all campus discussions when Professor Hetson cruelly decides to debate it with his students just to see Joey squirm at the talk. Meanwhile, Jack makes an attempt to get to know his cultural professor, Mark Freeman, better, but he pays no attention to Jack. Pacey, while struggling to survive the first days on his new job, closes a very important deal for the firm, which his wheeling-dealing mentor Rich Rinaldi takes full credit for. Eddie, at student in Joey's reading class and whom works as the bartender at Hell's Kitchen, persuades Joey to confront any challenge that Hetson throws and not show any weakness because the stern and misogynistic Hetson thrives on it.

Dawson's former girlfriend, Natasha, (whom Dawson met and dumped during his summer in L.A.) returns as the new lead actress for the movie and now he has to deal with the consequences of dumping her over the phone. The production orders some food from Hell's Kitchen and Joey delivers it on the set, forcing her to see Dawson. Natasha gets angry and jealous when she sees Joey and has Todd fire Dawson by saying she will not work unless Dawson goes. But Natasha soon realizes Joey has hurt Dawson much more than he hurt her. When Eddie confronts Joey about her uncertainty, she decides to "follow an impulse" and kisses him. Meanwhile, Pacey ditches Audrey and goes to a strip club party with his bosses. Audrey runs into him and goes to a party with Jen and Jack, where she gets drunk and almost sleeps with a guy, if it weren't for C.J.'s stopping her. Also, Jack is disappointed when Professor Freeman tells him his wife is pregnant, and later makes a move on Jack.

Heather Tracy, Dawson's movie producer, arrives on the set and threats to shut down production on the film if the lead, Natasha, isn't replaced. The egotistical Todd doesn't do much to save her job and it's up to Dawson to keep the film from being canceled altogether. Back at Worthington University, Eddie has an argument with Professor Hetson over him criticizing Joey's presentation and he storms out of the class. Joey leaves after him, and then she discovers he's not a student after all. Meanwhile, Emma asks Audrey to be the new lead singer of her all-girl punk rock band, Hells Belles, which will perform at Hell's Kitchen. But Pacey continues working late hours and misses Audrey's debut performance. Also, Jack confronts Professor Freeman after he gives Jack's paper a C- which Jack thinks was the result of an argument the previous day.

On Halloween night, Todd throws a costume rave on the sound stage where Dawson thinks he sees the ghost of a famous Hollywood actress whom was murdered, while he also sees Todd and Natasha becoming more friendly. Jen is encouraged by Jack to call C.J., but she thinks he's gay after he shows up at the rave with another guy. Jack has a talk with C.J. and finds out the guy he's with, David, is gay, but not him. But C.J. also confides in Jack that he's not interested in Jen either. Meanwhile, Joey is stuck babysitting for Professor Hetson's annoying and headstrong 15-year-old daughter, Harley. Eddie helps her by taking them to a haunted house, where he and Joey kiss. Also, Audrey breaks up with Pacey at the costume rave after she overhears him talking to Emma that he doesn't love Audrey anymore.

Dawson gets concert tickets for the band 'No Doubt' for the entire gang. Joey asks Eddie to go with her, but she forgets their tickets. But they sneak backstage anyway with a little help from Eddie's father who works as a maintenance man in the building. Jen sets Pacey up to meet Audrey at the concert hoping they'll reconcile. Everything goes well at first until C.J. confesses to Jen that he and Audrey slept together the night before, and he later confronts Audrey about her relationship with Pacey. Pacey learns about it and starts a fistfight with C.J. in which they get thrown out of the concert, as well as Jen, Audrey, Emma, Jack and David just for being with them. At the same time, Dawson misreads his tickets that are for Saturday's concert, and he and Natasha end up in jail after a policeman catches them making out in the parking lot, and Todd has to bail them out.

A big movie star, named Max Winter, arrives on the set to act with Natasha, and the flirting between them upsets Dawson. Pacey takes Emma to an office party where she finds out that Pacey is using her to win a contest among the office employees to see who brought the hottest date. Meanwhile, Joey has an upcoming Hetson final and Eddie offers his place for her to study. In the morning, they talk and end up having sex, which causes Joey to be late and she ends up missing the exam. Professor Hetson refuses to let Joey take a make up test and outright gives her an 'F'. Later that evening, Hetson comes to the bar and immediately starts an argument with Eddie where, in a very cruel tone, he tells Eddie how much he despises a loser like him taking up Joey's time. The hot-tempered Eddie falls right into the trap by punching Hetson in the face, and he gets instantly fired from Hell's Kitchen for it. Admired by Eddie's actions and stand against the mean Professor Heston, Joey then tries to cheer Eddie up and admire him for his noble act by taking to a local ice skating rink where they declare their love for each other.

Dawson goes back to Capeside to celebrate Christmas and brings Natasha and Todd with him where Dawson can't get past the fact that he saw Natasha and Max together, and Todd's drunkenness bothers Gail. Joey also arrives back in Capeside with Audrey, where Eddie later arrives with a Christmas tree to celebrate. There Eddie meets and has an argument with Joey's father, Mike Potter, who worries that Eddie might not be good for Joey since he's now unemployed and doesn't go to college. Pacey also comes back to spend time with his brother Doug who does not like the expensive gifts and constant, lavish spending Pacey is doing after making a lot of money at his stock trading job. The gang, as well as Jen and Grams, gather to have Christmas dinner at the Leery household which goes disastrously wrong where a drunken Todd makes an embarrassing thanks, but not as embarrassing as Audrey's, whose drinking problem has gone so out of control that she lashes out on everyone, and wrecks Pacey's new car.

During a typical five-day work week, Joey is incessantly trying to reach Eddie while dealing with Harley Hetson showing up at Hell's Kitchen every day after cutting school. When Harley persuades Joey to see Eddie, she is devastated after finding out that Eddie has moved out of his apartment without saying a word. But Joey manages to persuade Harley to behave like an adult, and she also finally stands up to the intimidating Professor Hetson to help him look after Harley once in a while. Meanwhile, Pacey begins skipping work by hanging out at the Boston Aquarium with Emma. But any romance between Pacey and Emma is quashed when Rich Rinaldi buries Pacey with more paperwork, making him miss his lunch date at the aquarium with Emma. Jen starts working as a peer counselor with C.J., but her personal interests get in the way of her work. Jack and David both get tested for HIV which leads to them talking about their sexual pasts. Dawson and Todd fly to Los Angeles after photography on Todd's movie, "Wicked Dead" finally wraps up. But Heather Tracy and the executive producer, Larry Newman, want Todd to re-shoot the entire ending. After Todd refuses, due to his pride and ego, he gets fired and Dawson is ordered to step in as director. Also in L.A., Audrey goes back to her roots by hanging out with her party-loving friend Jack Osbourne.

Joey agrees to be Pacey's temporary secretary over his recent promotion. But they both have second thoughts when their mutual jealousy leads to disaster in the office over a reporter, named Sadia, the same woman whom met Pacey at the office party (in the 'All the Right Moves' episode), as well as Joey not getting along at all with the pig-headed and callous Rich Rinaldi. Meanwhile in Los Angeles, Dawson sells his idea for a coming-of-age movie, but when the studio heads Heather Tracy and Larry Newman want to change the movie into a teen sex film, Dawson must decide if he should take the lucrative deal or stick with his original concept. Also, an open-minded Grams is the intermediary that brings Jen and C.J. back together.

As Dawson abandons his lifelong dream of becoming a filmmaker and works to pay off his huge credit card debt, Joey decides that Dawson must realize his dream, and rallies everyone she knows to help him begin production on his movie, which is the autobiography of his life. Joey forcibly recruits Harley and Patrick to play the roles of Joey and Pacey, and George volunteers to play Dawson, while Audrey volunteers for the role of Miss Jacobs. Gail even calls Todd Carr to assist with the production and Doug Witter for security, whom is now the acting sheriff since Mr. Witter is too sick to work anymore. Meanwhile, Pacey is newly inspired to raise the funds that are needed by going to various local businesses to raise money and at one meets a crush from his past, Christy Livingston. As filming wraps, Jen, Jack and Grams say goodbye to everyone as they leave for New York City where Jen and Jack transfer to NYU. Joey acts an a mentor to get Dawson and Pacey to make up while she finally achieves her life-long dream of going to Paris.