It's the start of the school year. For their upcoming anniversary, penniless Spinner wants to get the perfect present for Paige. His idea: get her the perfect locker, since the one she has been assigned she considers in purgatory. In Spinner's mind, Hazel has the perfect locker, but it will take some swift maneuvering to get Hazel to give it up. Emma has thoughts other than school on her mind. With Spike almost ready to give birth and with Spike and Snake's recent marriage, Emma has been thinking about her biological father, Shane McKay. Spike has told Emma nothing about Shane, except that she wants Emma to have nothing to do with him as he deserted them. All Emma vaguely remembers is meeting Shane once in a hospital when she was three years old, Emma remembering that Shane was wearing a doctor's uniform. Emma does whatever she needs to to locate Shane and know her biological dad.

Through Snake's alumni database, Emma does locate her biological father, Shane McKay, at an address in Stouffville. When she arrives at that address, she sees that it is a medical institution and that Shane, mentally disabled, is a patient. Emma's first thought is that her mother is a heartless woman who deserted Shane during his time of need. Emma's view of her mother changes when she learns the full story and why Spike did not tell her the truth about Shane. But Spike may be in trouble when Shane escapes from the institution and wants to see his old girlfriend. Meanwhile, Spinner managed to get Hazel's locker for Paige, who deems it not to be the perfect locker. In her mind, Jimmy has the perfect locker. Jimmy, knowing that Spinner will probably do anything for the locker, makes a deal with Spinner, one not only that Spinner will find embarrassing to do, but one that Spinner does not realize will put Paige in a bad light.

Feeling like a wallflower, Manny decides to try out a new overtly sexual fashion style at school despite it contravening the school's code of conduct. Her attempt at looking sexy has the affect that she is hoping. The person who shows the most interest in her is her long time friend J.T., who is a bit confused about these new feelings he has for his friend. But he has to work fast to attract her attention as others are also showing interest in her. With her new look however is also a new self-absorbed attitude. Meanwhile, Craig, Marco, Jimmy and Spinner have formed a yet unnamed band. Joey has allowed them to use his garage as a practice space. Joey is vicariously reliving his teen-aged years through the band much to Craig's chagrin.

A group of the kids go to the beach for the day. Despite stating that she will no longer be his cover as his girlfriend, Ellie, who doesn't really get along with most of the others but especially Paige, decides to go along on Marco's invitation. Also along as the chauffeur is Paige's openly gay older brother, Dylan. Dylan, attracted to him, suspects Marco may be gay. Marco, also attracted to Dylan, is not ready to come out, especially to his supposed best friend Spinner, who is openly homophobic. Marco goes out of his way to hide his sexual orientation. This includes showing an interest in team sports and going on a date with an unsuspecting Hazel. Meanwhile, Archie is staying at the Jeremiah's temporarily as he has a cold and Spike does not want him to infect Jack. Beyond ruining his weekend with Ashley as the unexpected chaperon, Craig thinks that Snake's symptoms may be a manifestation of something beyond the common cold.

Spinner does not react well to Marco coming out to him. Without initially actually outing Marco to the general populous, Spinner does whatever he can to freeze Marco out of his life. Spinner spreads the news amongst their closest group of friends, all of who think Spinner is acting like an idiot. Marco will need all the support he can when he learns first hand what it's like to be gay in an intolerant society. A specific incident pushes Marco further in the closet. Meanwhile, Snake's initial medical diagnosis is possible leukemia. He tries to make light of the situation, which affects Emma more than anyone. Regardless of the final diagnosis, his actions, in part because of the possible diagnosis of leukemia, benefit Degrassi as a whole.

Snake's illness is causing a strain on Emma and Sean's alone time. Sean, feeling lost without Emma's support, has thoughts of his old troubled life. He starts to gravitate toward trouble-makers Jay, Alex and Towerz. A fight with Emma over their lack of time alone together turns Sean's thoughts into reality. Sean does whatever he feels he needs to be to be accepted, an act which ends up hurting Emma. Meanwhile, J.T. is hanging out with the in crowd - his new friends - leaving Toby in the lurch. At a sleep-over at Toby's, an embarrassed J.T. has a wet dream over Liberty, which Toby lords over him as blackmail in also being able to hang out with the in crowd.

Things are pretty hot between Craig and Ashley, but he's disappointed that she keeps pulling back from going all the way.

Ellie is facing some stresses in her life. Her soldier father has just been shipped overseas, to which her alcoholic mother does not react well. She has an interview for what she considers her dream co-op job working for Caitlin at the radio station doing stories on social causes, but she's up against "perfect" Paige for the sole position. These stresses end up having a physical manifestation, which Ellie, ashamed, feels she needs to hide. Ellie gets an unexpected source of support. Meanwhile, Terri has been receiving roses from a secret admirer. She suspects it's Toby, but really is hoping it's shy Rick.

Emma decides it's time to move on in matters of the heart when she realizes she has feelings for new kid Chris.

Terri is at the top of her game when she lands the lead in the school play and has a wonderful boyfriend in Rick. However, Hazel is concerned when she notices Rick's overly controlling behavior. Spinner fights feeling jealous when JT starts spending a lot of time with Paige.

The Christmas season brings more than just holiday cheer to Degrassi. Caitlin is confused and lonely when she realizes she still has feelings for Joey, who already has an arrogant new girlfriend. Craig gets caught up in his own lies when he continues seeing Manny behind Ashley's back.

Manny threatens to tell the whole school about their relationship if Craig doesn't dump Ashley once and for all. Joey has trouble getting a grip on his emotions after kissing Catlin; should he stay with Sydney or reunite with the girl who got away?

Emma becomes obsessed with getting Sean busted when she suspects he and his gang are stealing things from Degrassi. Paige, Spinner, and Jimmy enroll in a driver's education class and Paige develops a crush on their instructor.

Manny falls flat at her gymnastics meet because she feels nauseous. When her sickness doesn't go away, Manny begins to worry it may be something more than the flu.

Manny and Craig's pregnancy is outed by the furious Ashley to the whole school during lunch. Their failed practice to take care of Spike's baby convinces Manny, but not Craig, that, at 14, she is not ready for motherhood.

Jimmy, Sean, Ellie, Toby, and Hazel land in Mr. Raditch's Saturday detention. Despite their different cliques and different styles, they come to realize the similarities between them and decide to work together to get through their detention.

Terri wants to give Rick another chance but when she has to choose between her friendship with Paige and her love for Rick, the result is tragic. Sean gets annoyed when Marco keeps tagging along on his dates with Ellie.

Craig is determined to beat his ex-girlfriend Ashley when both of their bands are entered in an upcoming battle-of-the-bands competition. After Joey hurts his back in an accident, Catlin steps in to care for him and his daughter Angela.

The year-end Junior Formal is fast approaching, and Marco is in charge, except when it comes to a date. Problem is, Marco's too nervous to ask Dylan out at all, let alone ask him to the prom.

Paige and Spinner decide to take a day off from school. Paige invites Ashley to come along and Ashley announces she's leaving Degrassi. Paige and Spinner have to show her a good time and try to convince her to stay. Meanwhile, Emma discovers Mr. Simpsons will and worries his chemotherapy has failed.

Sean chooses to move out on his own, meanwhile J.T. attempts to ask Manny to the dance.

The end of the year dance has arrived at last! Jimmy wants everything to be perfect for Hazel but nothing goes as planned. Sean's guilt gets the best of him and he confesses to stealing Mr. Simpson's laptop. Earning Mr. Simpson's forgiveness, however, is going to take much longer than Sean anticipated.