Joey is looking for a new job and gets one as a waitress at the Yacht Club Restaurant pretending to know a very affluent family. But she is tricked by her boss' snobbish, trouble-making son, Drue Valentine, who sees through her lies, but decides to let her stay on in order to get to know her better. Meanwhile, Mitch, now working as a guidance counselor at Capeside High, tells Pacey he's not going to graduate unless he makes up for his bad grades. Pacey doesn't want Joey to know, but Mitch tells Dawson, who tells Joey. Gretchen also finds a new place to live in the form of a wretched beach front house, and Pacey willing moves in with her. Jen gets ticked off after the departed Henry breaks off their relationship by e-mail whom he sends to Jack instead of her.

Andi gets early acceptance into Harvard, exciting Jack and their father. But accomplishing what should be the biggest thing in her life doesn't make her happy. She decides to explore different paths in her life by going to a rave with Jen and Jack. Andi steals an Ecstasy pill from Jen, which reacts badly with her anti-depressant. Meanwhile, things get awkward during the party when Gretchen brings along Pacey, Joey and Dawson, who is growing more attracted to Gretchen. Also, Mitch and Gail decide to keep their baby.

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.

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.