Inspector Lastarza of the Organized Crime Unit tells Lt. Fancy and Kelly that they stop applying pressure to the local mob for their pursuit of Angelo Marino is hurting the FBI investigation to nail Marino. Meanwhile, Sipowicz regains consciousness in the hospital after the shooting, but he has no memory about the attempt on his life because he was drunk at the time. Laura and John Kelly become officially separated and she decides to join a private law firm. Josh "4B" Goldstein becomes more paranoid about his mugging and brings a gun into the laundry room every night in hopes to catch his attacker. Kelly tries to reason with a deranged man who has taken a judge hostage who let his son's killer free. Elsewhere, Angelo Marino puts more pressure on Janice to murder Kelly, but she kills him and his chauffeur/bodyguard instead and slips away.

Janice is contacted by Richie Catena, a mob button man and former associate of Marino. They want her to start doing favors for them again or they will expose her past activities with the late Marino. Janice agrees to co-operate with them without telling Kelly, but she tells Inspector Lastarza who tells her to go along with it. Meanwhile, Martinez is distraught when he learns that his brother has died from a drug overdose. But their father, Hector, wants to go out and kill the pusher who's responsible for his son's overdose. Also, Medavoy celebrates his 40th birthday and later musters enough courage to ask Donna out on a date to an ice skating rink.

Kelly, Medavoy, and Martinez investigate the brutal murder of a entire upper class family. Meanwhile, Inspector Lastarza orders Janice to cooperate with the mob even though it results in the death of the person whose license plates she ran through the computer, and Kelly deals with his relationship with her who tries to keep him out of the situation she's in. Also, Sipowicz takes a statement of a gay writer whose Academy Award was stolen.

As Christmas draws near, the zone commander, Haverill, starts to come down on Lt. Fancy about his work skills and Sipowicz later intervenes and threatens Haverill to lay off Fancy or he will reveal some incriminating evidence about him being a racist. Meanwhile, Kelly and Sipowicz investigate the kidnapping of a doctor's daughter. Janice must pass some more information to the mob about the station's moves and wonders how she will get out of this situation. Also, Martinez and Medavoy question a woman and her young son who claim to have been robbed by a man who picked them up while they were hitchhiking in North Carolina. But Martinez later discovers that the woman, Kathy, is not who she claims to be, which leads to a hostage situation, involving Donna, at the station. Sipowicz reluctantly plays Santa as the precinct's annual Christmas party, and Martinez receives his gift from Lt. Fancy when he is promoted to detective, while Medavoy panics when the station's pet cat eats the Christmas rabbit, and Kelly visits his Alzheimers-stricken mother who resides in a nursing home.

The mob hit man who killed Giardella and who Laura can identify, is trapped on the roof of the building with a hostage. Martinez works on his first detectives case, which involves a fake ATM machine taking peoples money. Meanwhile, Fancy and his wife prepare to face a court date when a foster child they've been caring for is ordered back into custody of the real mother who's just been released from a drug rehab program. Sipowicz and Kelly investigate a shooting of mobster Tommy Linardi, whom had taken over the late Angelo Marino's organization, in which turns up a notebook that Marino kept which has Janice's name in it. Janice asks Kelly for help who decides to steal the notebook to protect her from further investigation to Marino's murder, while Fancy again locks horns with Inspector Lastarza over the handling of the case.