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.

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.

Audrey gets a little too drunk before a concert with 'Hells Belles' band at Hell's Kitchen, and ends up making a scene and trashing the place. C.J., who was there on a "non-date" with Jen, tries to give her a little comfort and end up taking her back to his place. Meanwhile, Jack attends Professor Freeman's book signing and tells him the moment for Jack to make his move has passed as Freeman informs him that he has quit teaching to concentrate on his writing career. Jack then goes to invest his relationship with David, who waited all night long for Jack to show up at the bar. Joey feels bad for not being there for Audrey and has an argument with Eddie. When Eddie comes over to Joey's dorm to hand her Audrey's wallet that was forgotten at the bar, they decide drop their little game and go on a date. Also, Pacey's firm partners go down to New Orleans to celebrate a business deal, and Pacey has a big disappointment when he learns that the girl he's with is a call-girl bought by Rinaldi.

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.

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.

Harley tries to encourage Joey to make up with Eddie after they find him now living with his parents in nearby Worcester, and even gets him to return to her with a made-up story about Joey being pregnant. Meanwhile, Audrey returns from L.A. with a more positive attitude. After apologizing to her friends, Emma takes Audrey back in the band Hell's Belles for a big concert. But Audrey cannot stay away from liquor in which she performs drunk, and passes out on stage, and Emma fires her from the band. Meanwhile, Pacey is invited by Rinaldi to an exclusive party for the best stockbrokers and gets a promotion of handling a mysterious account led by the shady pharmaceutical entrepreneur Roger Stepavich to handle the client's major pharmaceutical company. All is well until a mysterious woman tells Pacey that all that good might have some bad, which raises suspicions on Pacey about Rinaldi's true intentions towards him.

In Los Angeles, Dawson visits Audrey at the rehab clinic where he spots a big time film producer, named Toni Stark, and follows her into a therapy session hoping to talk to the woman who'll direct Dawson to better contacts. Meanwhile, Pacey throws a party at his place to celebrate his new success at his job as well as purchasing a new super-sized TV set and is surprised when Joey, still sulking over the departure of Eddie, lets loose by getting drunk and setting up a spontaneous game of spin the bottle. Jen catches the reformed alcoholic C.J. with a drink which leads to them arguing, and making up by having sex for the first time. Also, Emma tries to stay in the country to get her green card by courting a stoner to marry her until Jack offers to marry Emma. But in the end, Emma decides that it's not worth it and decides to leave.