The class movie hits some trouble, giving Dawson an advantage. Joey falls in love with a visitor to the town. Pacey's school achievements and his relationship with Tamara intensify. Dawson brings his feelings about Jen out into the open.

Capside is abuzz with rumors of a teacher's indiscretion, rumors that could prove fateful for Pacey and Tamara. Pacey then takes it upon himself to go before a school board hearing to admit to personally fabricating the rumors to clear Tamara. Meanwhile, Joey and Jen get a life lesson when Bessie is aided by an unlikely source, Grams Ryan, when she goes into labor and gives birth to her baby in Dawson's living room, with Dawson videotaping the whole thing.

An economics class project pairs Dawson and Jen as husband and wife, as well as Pacey and Andie as a married couple. Jen, with a little of Abby's help, tries to take advantage of this project to get closer to Dawson, while Pacey gets to know a little more about Andie's background from Jack. While doing this project, Joey learns that as a single parent, she has a better chance of success in life, but does not see the same for Bessie who begins pressuring her to work harder at the Ice House. Also, Mitch and Gale's marriage continues to deteriorate to a point where neither one wants to be around the other.

Dawson goes back to Capeside to inform his parents of his decision to drop out of USC and stay in Boston. Mitch reprehends him and tells him he belongs in California, but Dawson's decision is made. Meanwhile, Jack is accepted on the Sigma Epsilon fraternity house and has doubts if he should go because they want him because he would be filling a quota of being a gay member. Joey finds Pacey working at the restaurant and goes pay him a visit on the boat where they have a nice conversation about their current lives. Pacey, bored of just peeling potatoes at the restaurant, has to put up with one waitress, named Karen Torres, and her bad mood in which he later finds out because he got the kitchen job she wanted. Also, Jen and Charlie try to go through 12 hours without sex so they can learn more about each other.

Dawson's therapist advises him to go to New Hampshire (where his documentary film of Arthur Brooks is being honored) and take a friend with him since he's been feeling so estranged from them. He takes Jen (who gets heartbroken after finding out that Charlie is trying to reconcile with his other girlfriend, Nora, and not her) and they pretend to be a couple, getting a very romantic honeymoon suite. Meanwhile, Jack brings Joey and Audrey to a frat party and Joey finds out they're only there for the fraternity brothers to score with them. Also, Pacey takes Karen on a non-romantic date and they accidentally sleep together, in which she reacts confused, quits her job, and hits the road.