Krystle finds Blake in the mountains and gets him to the hospital. Nick Toscanni disappears. Cecil is also brought to the hospital, and he's very weak. A police investigation is started to find the baby. The suspects are: Farouk Ahmed, Nick Toscanni, nurse Susan, and an old cemetery worker called Alfred Grimes.
Michael goes to Denver to find out who he is. Alexis and Cecil plan a wedding in the hospital. Claudia disappears and Blake suspects her of kidnapping the baby. There's an exiting drama on the roof of a tall building. Claudia has the baby in her arms and refuses to give her away, thinking it's Lindsay.
The baby is recovered from the real kidnapper, Alfred Grimes, and it turns out he's the father of Roger Grimes. Fallon fires Susan. Claudia leaves for a sanitarium. Fallon starts looking for a job. Blake gives her his hotel La Mirada. She and Michael meet, but without knowing they may be brother and sister.
Cecil leaves his estate and Colbyco to Jeff and Alexis. He also reveals his "Rhinewood" game to Blake at the reading of his will. Blake suspects Alexis of being a part of it. Adam finds Alexis and shows her the silver rattle he had when he was kidnapped and she believes him.
Alexis gives her newfound long-lost son Adam a job at Colbyco. Blake starts to believe that Adam may actually be his real son. Fallon and Adam keep flirting with each other, not knowing they are siblings. Adam has dinner with Krystle and Blake, but it ends with a conflict. Alexis finally meets Krystle's first husband, Mark.
Joseph's daughter, Kirby comes to stay with the Carringtons after breaking up with her fiance in France. Joseph tries to persuade her to go back to him. Mark gets the job at Fallon's hotel. Blake tries to get help from congressman Neal McVane. Jeff and Adam have problems working together. Adam gets the hold of a toxic chemical mixture.
Fallon gets a letter from Steven and it turns out he's on an oil rig in the Java Sea, Indonesia. Adam mixes the toxic compound in the paint for Jeff's new office. Fallon hires Kirby as a nanny for little Blake, and throws a big opening party for her hotel, which she now calls "La Mirage".
Jeff starts to become dizzy and affected by the toxic paint Adam used in his office. Joseph tells Kirby to stay away from Jeff. Krystle goes to Acapulco to find out what really happened with so-called divorce from Mark. Blake comes after her to be with her and she tells him the truth. The oil rig Steven works on explodes.
The Carrington family is informed that Steven's oil rig exploded. Blake goes to look for him, with an uninvited Alexis. Sammy Jo's father returns to Denver to collect Sammy Jo's share of Steven's inheritance, but Krystle throws him out.
Alexis and Blake continue the search for Steven in Idonesia, but find evidence that Steven might be dead. Blake refuses to believe it, and hires a psychic, Jason Denner, to help. Jeff gets really ill from the paint in his office. Adam rapes Kirby. Frank surprises Krystle outside La Mirage, still wanting the money, but Mark beats him up, and then bribes him to get him away.
Back in Denver, Blake continues his frantic search for Steven with the help of psychic Jason Dehner. Blake refuses to believe his son is dead, and Krystle is worried about his erratic behavior. Seeing how much she loves Blake, Fallon mends fences with stepmother, Krystle.
An obviously ill Jeff continues to function in a confused state. Sammy Jo announces she's headed for New York to make it big as a model and no longer wants to keep her son, Danny. Blake offers the girl $100,000 to be a mother to the child, but she declines.
Jeff's temper continues to grow more volatile. Adam attempts to implicate Jeff in the Cecil Colby/Logan Rhinewood scandal. After learning that Blake and Krystle intend to adopt Steven's son Danny, Alexis demands custody of her grandson.
Although Blake begs her to postpone taking action until Jeff's violent behavior can be explained. Fallon flies to Haiti to obtain a divorce; Mark shows up unexpectedly at her hotel. Adam asks Kirby to work for him; Alexis tells Adam she cannot allow Jeff to be poisoned.
Alexis is concerned the doctors will learn the truth behind Jeff's illness, but Adam tries to cover by ordering his office remodeled and the lethal paint compound removed. Mark and Fallon get closer in Haiti, while Kirby reveals her feelings for a hospitalized Jeff; Alexis tells Blake she is planning to orchestrate a Denver-Carrington/Colbyco. merger of both companies with her in charge.
Krystle suspects Alexis knows the reason for Jeff's illness; Blake tries to to prevent Alexis' proposed merger; Jeff is released from the hospital and Kirby reveals her feelings for him; Krystle observes Mark and Fallon kissing after their return from Haiti, and she cautions Fallon about starting a new relationship so soon.
As Blake is departing for Singapore to identify his son, Alexis intercepts him at the airport to assure him she will not be stopped from merging their respective companies. Despite Alexis' efforts, however, Blake is assured of Congressman McVane's help in stalling official approval of the move..
Blake persaudes Steven to return to Denver for his son's sake. The rest of Carringtons are emotional learning that Steven's alive and returning home. once home, Steven reunites with Alexis, Fallon and Krystle and is introduced to his brother, Adam, and son, Danny.
Upon hearing that Kirby has married Jeff, Joseph tells his daughter she has ruined her life. Blake suggests to Alexis they call a truce to their battle over Steven; Alexis offers Steven a share in Colbyco. Adam informs Fallon he doesn't consider Steven emotionally capable of handling the family business.
The board finally meets to decide the merger between Denver-Carrington and Colbyco. Alexis threatens dismissal for any member who votes "no." When Congressman McVane tries to stop the merger, Alexis exposes him to the media. Kirby becomes jealous of Jeff and Fallon. Krystle tries again to intervene in the problems between Blake and Steven. Jeff calls Adam out for falsifying company reports. Alexis exposes Mark's past to Fallon.
Blake confronts Alexis with evidence of fraudulent figures involved in the recent merger; Alexis learns Blake's lucrative oil extraction process does not extend to Colbyco. Newlyweds Jeff and Kirby have their first fight; Steven visits Claudia at the High Meadow Sanitarium. Alexis offers Mark money to leave Fallon; he refuses.
A scandalous newspaper headline implicates Congressman McVane with a young girl in Washington; he realizes Alexis orchestrated his downfall. Kirby finds she is pregnant; Adam is alarmed to learn that his former physician, Dr. Billings, lS soon due in Denver for a convention. Krystle and Alexis argue over Fallon, and the discussion quickly disintegrates into a brawl.
When Blake learns Steven's attorney Chris has moved in with his son, he vows to fight for custody of little Danny. Morgan Hess, Alexis' private investigator asks his employer for a large sum of money to payoff a gambling debt; when Alexis refuses, Hess leaves with a threat. Kirby realizes her baby was fathered by Adam.