At her sister Bessie's persuasion, Joey goes to visit her father in prison. Dawson tags along and leading them to spend the night in a motel where he finally reveals his true romantic feelings for her, while Joey debates going to France for a semester abroad to escape from her troubled home life in Capeside. Meanwhile, Grams tries to persuade the atheist Jen to act through prayer as her comatose grandfather is admitted to the hospital. Also, the sarcastic Pacey continues quarreling with Doug over Pacey's failing grades, which all emits from Pacey's extremely low self-esteem.

Dawson's confidence as a filmmaker is shaken when his new film class teacher, Nicole Kennedy, a Hollywood movie studio executive on sabbatical in Capeside, speaks her mind and tells him the painful truth about his new romance movie and its faults. Meanwhile, the future is unsure for Joey when she visits a Gypsy fortuneteller at the annual Capeside Fair, who advises her to be open to every new opportunity that crosses her path. Shortly after, Joey stumbles into Colin Manchester, a gorgeous photographer who brings out Joey's free-spirited side during a wild photo shoot. Also, Jen tries to persuade Grams to go out with an old flame, and Pacey becomes more uncertain about where he stands with Andie.

With Joey's father back in town after being paroled from prison, he persuades Bessie to expand the Ice House to cater weddings. Needing help, they enlist the services of the gang as staff. Andie tells Pacey that she hates weddings, but he loves them, while Joey doesn't think her ex-con father should be seen around Capside. In a comedy of errors, Jack and Dawson battle to help a scared bride, Andie and Pacey scramble to fix the wedding cake, while Mitch shows up with his new girlfriend Nicole Kennedy making Gayle sad, and Dawson angry. Also, the trouble-making Jen and Abby crash the ceremony to steal some food and liquor for another night out which eventually leads to tragedy.

In the aftermath of Abby's death, all of Capeside is attempting to 'whitewash' her life. But all the hypocrisy is making Jen angry knowing that Abby's 'good life' was all a scam. At Abby's funeral, Jen delivers part of the eulogy where she embarrasses Grams by announcing that Abby taught her the falseness of God. Meanwhile, Abby's clueless mother asks Andie to deliver the eulogy after mistakenly thinking that they were friends. Joey is afraid to attend the funeral which brings back bad memories of her own mother's funeral while Dawson persuades her to overcome her fears. Also, Gail tells Dawson that she has accepted a job offer as an TV executive in Philadelphia.

Concerned for Andie's well being, Jack phones their father who arrives back in Capeside where he announces that he intends to take both Andie and Mrs. McPhee to Providence for treatment in a mental hospital. Both Jack and Pacey are stunned at the news which leads to Pacey and Andie to decide whether her mental wellness is more important than being together. Jack also must decide if he wants to go with Andie and their mother, or stay alone in Capeside. Meanwhile, Dawson is preparing his film class' final exam by videotaping all individuals involved as well as helping Joey's father, Mike Potter, extend the Ice House for Bessie. After being shunned by everyone, Jen wonders where she'll live after her parents tell her by phone that she is not welcome to come back to New York.

Dawson's suspicions about Mike Potter become confirmed when he sees him selling drugs again and is torn on whether or not to tell Joey or leave things as they are. But Pacey's grumpy and misanthropic father, Sheriff Witter, is already suspicious and has the Ice House staked out hoping to catch Mike Potter in the act in which the restaurant is set afire by Mr. Potter's competitors. Meanwhile, Gail tells Mitch that she has decided to take the job offer in Philadelphia and wants to leave as soon as possible with Dawson. Pacey becomes more depressed as his school grades start decreasing now that Andie is gone from his life and his domineering father verbally bullies him. Also, Jen becomes more and more depressed over Abby's death in which Jack wonders if she is suicidal. Eventually, Grams asks Jen to come back to live with her and Jack is welcome to live with them too.

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.