Kirby's health problems continue; Peter urges Fallon to try cocain; Tracy sabotages Krystle at the office to gain Blake's favor; Allegre the race horse is stolen; Claudia receives violets...from her late husband.
Blake grows suspicious of Peter DeVilbis; Claudia receives more violets from 'Lancelot'; Adam tells Blake the truth of the poisoning incident; after suffering a seizure, Kirby undergoes emergency surgery and loses her baby.
Allegre is returned and Blake's suspicions about Peter's involvement are founded; Tracy orchestrates a press campaign to ruin Krystle; learning her fiance has left the country, Fallon dashes from the hotel and is struck by a truck.
Krystle learns she is pregnant; Fallon suffers from painful headahces; Claudia and Steven visit Matthew's accident site in Peru; once home, however, Claudia receives a phone call from her late husband.
Dex finds Alexis with Rashid and turns to Tracy for comfort; learning the reasons behind her father's death, Kirby buys a gun; the mysterious caller turns out to be a tape recorded message; Alexis moves ahead with her plan to ruin Blake.
Kirby learns the truth behind her father's suicide; Krystle tells a stunned Alexis of her pregnancy; Fallon and Jeff announce they will remarry; Alexis' manipulations come to fruition when Rashid Ahmed announces Blake is planning to attack a nation involved in the China Seas Deal.
Blake travels to Hong Kong to patch up the China Seas oil deal and learns Ahmed has left the country; Mark blackmails Alexis for $100,000, and McVane watches as he deposits the check; Kirby attempts to kill Alexis but is unsuccessful.
Blake mortgages the mansion to raise money; Tracy tells Alexis of her affair with Dex; Alexis is questioned about Mark's death; Sammy Jo intends to obtain custody of her son; an unknown woman, full of curiosity about Alexis, checks into La Mirage.
Kirby's attempt to kill Alexis is unsuccessful, and Alexis promises to remain silent if Kirby will leave Adam; Sammy Jo reveals the culprit behind Claudia's mystery calls; Fallon is gripped with a seizure and drives off as her wedding is about to begin; Alexis is arrested for Mark's murder.
Following a serious traffic accident, Fallon mysteriously vanishes. Dex and Steven bail Alexis out of jail. Sammy Jo attempts to seduce Adam. Alexis flatters Adam by suggesting he work with her defense attorney, Warren Ballard. Dominique's husband Brady arrives at La Mirage and finds his wife suddenly interested in staying in Denver. Steven accuses his mother of killing Mark Jennings and ruining Blake's business. Despite her pleas, Steven tells his father everything.
Steven accuses Adam of conspiring with Sammy Jo to kidnap Danny. Blake arranges to take out a mortgage on the mansion. He little suspects Alexis has signed the note and will become the owner if he defaults. A cross-country search for Fallon has developed few leads. Warren Ballard and Adam prepare Alexis' defense. Dominique Deveraux makes her singing debut at La Mirage, with Blake and Krystle in attendance. Krystle quickly senses Dominique's hostility toward Blake.
To secure financing for his bankrupt company, Blake arranges to see Billy Waite, a notoriously underhanded oil man. Jeff continues his search for Fallon. Impatient with the progress her lawyer is making on her defense, Alexis fires Warren Ballard and retains Adam. Alexis visits Billy Waite in South America under the guise of concern about Blake's misfortunes. As she prepares to leave, the police arrive. She is arrested for fleeing to avoid prosecution and led away by the police.
In Seattle, Jeff and Blake learn the woman who died in the plane crash with Peter DeVilbis cannot be positively identified, but the ring she was wearing is indeed Fallon's wedding band. Back in Denver, Fallon's moving funeral is held. A deeply upset Alexis is given leave from prison to attend the funeral, and a tormented Jeff ends up creating a scene. Steven meets Sammy Jo in Los Angeles, where she demands payment of $30,000 per month for Danny's return. After Claudia points out his behavior only isolates him from the family, Adam is moved to action. Adam breaks into ...
Blake visits Dominique at La Mirage to discuss her recent revelation. She tells Blake that her mother was a long-time mistress of his father and has evidence to prove it. At Alexis' trial, a neighbor offers powerful evidence that incriminates Alexis. Along with Mark, she saw a woman on the terrace wearing a cape that has been positively identified as Alexis. Blake is called to testify and states that Alexis would indeed commit a violent act if sufficiently provoked. In a dramatic courtroom scene, Steven is called to the witness stand and he must tell what he knows or ...
On the witness stand Steven testifies he saw Alexis push Mark to his death. Jeff sees other women in an attempt to forget Fallon, but remains obsessed with his ex-wife. Dismissing her attorneys and deciding to represent herself, Alexis takes the stand and testifies she was not wearing the cape that incriminated her.
Adam and Dex vow to prove Alexis' innocence and begin a determined campaign. The woman who testified she had seen Alexis on the terrace with Mark had hosted a party that evening and snapped photographs. The negatives reveal it was Neal McVane who had framed Alexis form Mark's murder. Alexis is freed. Denver-Carrington is back in business. Alexis vows revenge on Dominique when she learns of her new partnership with Blake.
Amanda insists Alexis acknowledge their relationship and begs her to reveal her father's identity. Alexis tells her it was simply an anonymous ski instructor in Gstaad. Steven and Alexis reconcile and he rejoins Colbyco, where Luke Fuller, an attractive young man, has just been hired as public relations director. Claudia enters Steven's office to find Luke straightening her husband's tie. Amanda goes public with a front page story announcing she is Alexis' illegitimate daughter. Jeff meets an attractive young widow, Nicole, whose late husband was Peter DeVilbis.
Blake offers to help Amanda find her father. Claudia goes out with Dean on a dinner, while Steven rejects Luke. Jeff ends up sleeping with Nicole. Dominique goes to Istanbul to meet with Rashid Ahmed. On Blake's instructions, Adam is following Dominique and bribes the Turkish police. When Rashid signs Dominique's deal, the police shows up and Rashid is shot and killed as he tries to run away.
Krystle goes into premature labor and delivers a baby girl, who suffers from respiratory problems. She names the child Kristina after a friend who once saved her life. Claudia is uneasy when Steven accompanies Luke on a business trip. Amanda overhears Dex tell Alexis to stop hiding the identity of Amanda's father. Jeff finds a photo of Peter DeVilbis in Nikki's hotel room.
Upon learning that he may be Amanda's father, Blake resolves to ask Amanda to take a blood test. Nicole tells Jeff there's a chance Peter DeVilbis may have been with another woman at the time of the crash. Under the pretense of a family outing, Alexis arranges to send Dex and Amanda to a ski lodge. With the tension growing between them, Amanda and Dex begin to fight. Alexis finally arrives and announces the three are bound for London, where she and Dex will marry.
Amanda asks Dex to put a stop to his wedding to Alexis. Dominique joins the Carringtons for a Christmas gala, highlighted by an announcement from Blake. Blake strikes a deal with racehorse owner Daniel Reese.