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.

Pacey, enlightened by getting good grades, decides to take a sail on his boat and takes Jen with him for company. Meanwhile, Andie has an interview with Drue's mother for a college acceptance. But her medical records get in her way in which the egotistical and snobbish Mrs. Valentine worries about Andie's mental stability and outright denies her the spot. Everyone's plans change when a big storm rolls into Capeside, trapping Pacey and Jen at sea where Dawson and Joey steal a motorboat, owned by a cranky old resident, A.I. Brooks, to rescue them while Andie takes control of the situation at the Yacht club to wait out the storm. At sea, Jen and Pacey admit to each other their biggest regrets in life. Jen regrets never being in love, despite her feelings for Henry, and Pacey regrets the destruction of his friendship with Dawson.

Everybody starts to think about their future, and how they are getting into college with Joey concerned about Pacey not having grades good enough to graduate and she being Number Four among the top 10 best in school. Drue makes everybody think it's Jen's birthday so he can throw a party and make the moves on her in which it's revealed that that they've known each other when he used to live back in New York. At the gathering, a worried Joey gets drunk and says some concerning things to everyone involved. Meanwhile, Andie takes over Jack's applications for college and drives him crazy with her obsession over it while he is recovering from a pulled shoulder he gets at football practice. Gretchen gets a job as the bartender at Gail's restaurant, and talks with Dawson about his life problems and hers about the real reason why she dropped out of college.

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.

While Andie is recovering from her near-fatal drug overdose, Jack blames Jen for the incident, while Jen blames the deranged Drue for her life falling apart after he turns everyone, including Grams, against Jen by saying that she deliberately slipped Andie the ecstasy. Andie's father tells her that it would be better if she were to spend the rest of the year in Italy with her aunt, since she already has the credits required for an early graduation. Meanwhile, Joey is conflicted when she must ask Dawson to say a good word for a college acceptance form. Also, Dawson continues painting the misanthropic Mr. Brooks' house and realizes that the old man has his own personal life problems with his estranged family.

A sailboat owned by Capeside High's pompous Principal Dave Peskin, with "Class of 2001" written on the sail, and with his pet dog aboard, is found in the school swimming pool as part of a major school prank. As a result, Mitch Leery and Principal Peskin are after the guys who did it in which Dawson, Pacey, Jack and Drue are main suspects. Since, the dog that was on the boat instantly recognized Jack, Pacey had access to the yacht club and Dawson had access to the school keys. Each one has alibis for that day; Jack was at the soccer field with Jen to help plan a game. Dawson was cleaning Mr. Brooks parlor where he discovers that the that the old man was a former filmmaker from the 1950's. Pacey was with Doug on a routine police patrol where they squabbled about Doug's well being. Drue, despite his denials, is revealed as the culprit. But at the end, Joey finds out that Dawson, Pacey and Jack all teamed up to pull it off and to get Drue into trouble.

Jen reveals an important decision she's made with regards to college while Jack and Grams make a decision on their own for her. When Dawson comes up empty with answers to an important question on his college essay on registration for USC Film School, he turns to Mr. Brooks for inspiration and learns that Mr. Brooks' life in Hollywood eerily parallels Dawson's own life when Mr. Brooks left the filmmaking business after his best friend and girlfriend got together. Meanwhile, Pacey accompanies Joey to a formal party at the Yacht Club for prospective Worthington College students where the visiting dean, Walter Kubelik is impressed... with Pacey. Also, Gretchen takes over planning for Gail and Mitch's Christmas party at the restaurant where Mr. Brooks has a meeting of minds with Grams Ryan.

Pacey learns that Dawson and Gretchen are dating which doesn't suit him at all. So, Pacey tries to get Gretchen and her ex-boyfriend, Nick Taylor, back together when they go on a road trip to pick up her car at her college in Providence. Back in Capeside, Joey has her fair share of problems when she gets locked in a storage closet at the Yacht Club with none other than the loathsome sociopath Drue Valentine, whom has set up the whole thing to avoid visiting his estranged father in New York. Meanwhile, Dawson observes the feelings growing between Mr. Brooks and Grams and fears that Grams will get hurt when she finds out that Brooks, like her last husband, is terminally ill with cancer.

Mrs. Valentine forces Joey to go on a double date with Pacey to accompany Drue and his wealthy, dim-witted, girlfriend, Anna Evans, to make sure that Drue behaves himself. Of course this isn't an easy thing to do when Joey starts to get concerned over the attention that Anna is bestowing on Pacey. Meanwhile, Dawson has his own problems when he and Gretchen go out with two of her college friends and he realizes the span in between their ages. Also, Jack finally gets some positive attention from Tobey when he asks Jack for help in teach reading to grade school kids, and Mr. Brooks becomes more weaker from his illness during the final completion on Dawson's documentary. Knowing that his days are numbered, Mr. Brooks tells Dawson to continue to follow his dream as a filmmaker and not let the love of his life (Joey) slip away, and end up like him: a bitter, misanthropic, lonely old man.

While the rest of the school goes to the snowy mountains of Vermont for a ski weekend, Dawson stays behind to help Grams keep a bedside vigil at the hospital for the near-death Mr. Brooks. But things become complicated when Dawson learns that Mr. Brooks had earlier asked him to sign a medical clause which leads him to be forced to make an impossibly hard decision to decide whether or not to cut off Brooks' life support systems. Meanwhile, the ski trip evening takes an unexpectedly romantic turn when Jen sprains her ankle, she breaks into her room's mini-bar, gets drunk and nearly sleeps with Jack. At the same time, Drue and Anna Evans sneak into the events pretending to be another couple since Drue has been banned from the ski trip and Anna does not go to school at Capeside. Also, Pacey and Joey find their own ways to keep warm on the cold night by taking their relationship to the next level.

Unusual episode about four separate plots told in chronological order rather than concurrently as in previous episodes. "About Last Night": Left behind at the ski lodge, Pacey and Joey are forced to go home by bus where they talk about their sordid night before where he is insecure about his performance and she brings up her own insecurity. "The Big Picture": In Capeside, Dawson is forced to face Mr. Brooks' death by going through his belongings with Gretchen. But soon, Dawson gets surprised to find out that he is Mr. Brooks' will and finds himself with a lot of money in his hands, and no idea of what to do with it. "Excess Baggage": As punishment for breaking into her hotel mini-bar and getting drunk during the class ski trip, Jen is forced to see a psychologist where she can discuss her "inner teen issues." But Jen finds the psychologist, Dr. Tom Frost, to know more about Jen than she does about herself. "Seems Like Old Times": Joey's path with Dawson's collide when they spend an evening catching up on the past weekend and its many happenings. Dawson thinks Joey is different in some way. Here, he asks her the big question: did she or did she not have sex with Pacey during the ski trip? Torn between hurting her best friend by being honest, or lying to him, Joey outright lies and says she didn't sleep with Pacey.

The results of the Senior Polls have ramifications for Dawson, Joey, and Pacey, as the three try to ignore the taunting of the poll master, who happens to be Drue Valentine. While Pacey and Joey try to have some time alone together at his and Gretchen's house, Dawson finds his first night alone with Gretchen more awkward than he'd expected. Gretchen becomes angry and snappish with everything after she learns that Joey lied to Dawson about having sex with Pacey. Meanwhile, Jack becomes resentful when Jen drags him along with her to follow Dr. Frost to find out more about him and they end up going to a poetry reading group to stalk him out.

While Joey glows after being accepted into Worthington University, Dawson is forced to face a crushing rejection when he is denied to NYU. Joey's elated mood, however, is tempered by a sobering realization due to the fact her sister, Bessie, runs a B&B she can't afford the $15,000 tuition requirement, until Dawson proposes a surprising solution: loaning her the money Mr. Brooks left for him in his will, which increases her guilt for lying to him about sleeping with Pacey. Meanwhile, Jen and Jack have nothing but options when it comes to college. While Jack's convinced that New York is the place to go, Jen isn't so sure she's ready to return there because of unresolved issues with her parents. Jen tries asking Drue for advice on her past, but he's no help.

As Senior Ditch Day arrives, Joey is excited to find herself accompanying Jen on an excursion to New York City under the auspices of attending a college meeting. But it's not long before Joey realizes that they're there for an entirely different reason. Jen is there to meet her estranged father, Theo, where she reveals to him the roots of her self-destructive lifestyle. Meanwhile, eager to infuse their relationship with a bit of spontaneity, Gretchen and Dawson take off on their own road trip. But what starts out as unpredictable fun turns into one debacle after another when they get stuck in the middle of nowhere with a flat tire. Back in Capeside, Pacey and Drue find themselves the only seniors in school on Ditch Day. That evening, they set out for some real fun, drinking at a bar which leads to both of them getting arrested for underage drinking, leaving Pacey in serious doubt as to what his future will hold for him.

As everyone gets ready for this year's senior prom which is held aboard a yacht cruising on the cape, some bad news causes Gretchen to reflect on her life, and Joey worries about Pacey's odd behavior. Meanwhile, Jen and Jack meddle in each others' lives resulting in some interesting prom dates with him being paired with Toby and she being paired with Drue. At the prom, Joey and Pacey confront once unspoken issues after a series of misfortunes incidents, in which Pacey loses his short temper and explodes at Joey saying that he will not be attending any college and resents the fact that she and everyone else is. The festivities cause conflict for Gretchen as she questions her relationship with Dawson after she tells him that she has decided to go back to college and thinks their relationship will not work out. Jen ends up getting drunk and nearly falls off the boat, but is saved by Drue who tells that despite his unwholesomeness, he does care about what happens to her, while only Jack and Tobey are the sole happy couple among their circle of friends.

As the school year draws to a close, Joey and Dawson deal with their respective break-ups, while Jen makes a startling decision about her future when Grams announces that she is selling her house to pay for her tuition. Meanwhile, Dawson has his own decision to make with regards to Gretchen when he wants to be with her for the summer before she goes back to college. But Gretchen refuses when she sees the specter of Joey hanging over Dawson and leaves town without saying goodbye. When Mr. Kubelik from Worthington asks Joey to bring Pacey with her to a party for incoming freshman, which fills the pair with hope that they might be able to have a future together. But it's revealed that Mr. Kubelik wants Pacey to work for the summer on his boat as a deck hand.

As graduation day approaches, Joey has a tough time preparing her commencement speech, and Dawson helps her find some bittersweet inspiration. Pacey wonders if he's going to graduate at all and worries that his last final will be the toughest one. He walks out of it after his teacher makes a rude comment on him, costing him his diploma. Meanwhile, Andie McPhee returns to Capeside for the cap and gown ceremony, and is surprised to meet Jack's new boyfriend, Tobey. Pacey spends some quality time with Andie and decides he must get out of town to search for his feelings. After a friendly talk with Doug about his future, Pacey privately says his goodbyes to Doug, and then leaves town, vowing never to return. Also, Drue temporarily moves into Jen's house after being kicked out of his home by his mother after an argument. Drue then tells Jen that before they both graduate and go their separate ways to college, he convinces her to help him pull a hilarious senior prank for old times sake by setting off the school sprinkler system during the ceremony. But they get caught by Principal Peskin whom forces them to listen to his awful violin playing skills for three hours as their final detention of punishment.