Capeside High is abuzz with the gossip mill after Jack bares his soul in an English assignment and is forced to explore his innermost secrets while reading a poem he wrote out loud in class, leaving Dawson, Joey and Andie shaken by the implications of what it all means: Jack happens to be gay. Meanwhile, Pacey tries to defend Jack in the face of his adversarial English teacher, Mr. Peterson, and ends up getting in trouble when he assaults the petulant Mr. Peterson which causes a riff between Pacey and Andie. Also, Jen finds Ty Hicks to be full of surprises.

On Dawson's advice, Joey attempts to heal the wounds of her romance with Jack which has been left shattered by rumors and innuendo. Meanwhile, Jack and Andie's father, Joseph McPhee, arrives in town for a get-together which brings out old family tensions which leads Jack confronting his innermost secrets. For the first time in his life, Pacey stands up for what he believes in when he takes on the mean-spirited Mr. Peterson. But the consequences of his convictions are more than Pacey could have imagined when he's suspended from school and Peterson makes his personal agenda to fail Pacey with unethical means. Pacey then sets out to ruin Mr. Peterson by investigating and challenging his authority with a code of conduct book over his teaching methods. Also, Jen thinks that Ty may not be the guy for her when she sees little amusement in his stereotypical comments especially over Jack's true sexual orientation, while Grams is surprisingly understanding and supportive.

Joey aces Professor Hetson's final exam and ends the semester with a C+, and Joey is finally relived that her ordeal with Hetson is over. However, she decides she wants him as her advisor after she chooses English as her major. Eddie proposes they go backpacking through Europe before going their separate ways to college. Reluctant at first to jump so suddenly on such an intense trip, Joey decides to go, only to find a goodbye note from Eddie, this time for good saying that she deserves someone better than him. Elsewhere, David finally breaks up with Jack, who ponders if he was only with David to prove to himself that he could hold a steady relationship. Meanwhile, Pacey continues dating Sadia and selling stocks. But things change drastically, first when Sadia leaves him by returning to her fiancée. Then the biotech stocks that he and Dawson were investing in go bankrupt. Pacey then asks Rinaldi to borrow some money, but the cold-hearted Rinaldi refuses. Frustrated and angry, Pacey finally snaps and punches Rinaldi in the face, who instantly fires Pacey.