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.
Krystle reconciles with Daniel, who reveals that his break-up with her sister was amicable. Dominique, bitter over Blake's continued refusal to acknowledge her as a Carrington, considers a number of alternative courses, including a generous offer from Alexis for her share of Denver-Carrington. Claudia moves into La Mirage. Krystle confides to Steven that Daniel is Sammy Jo's father and therefore little Danny's grandfather.
Krystle begins working with Daniel. Blake is adamantly opposed and exchanges harsh words with Reece. Dex is furious with Alexis for traveling to Sumatra to see Blake's father. Alexis learns from Amanda of Dex's experience with Daniel in Vietnam. Jeff and Nikki follow the treasure map to a remote jungle location and find a statue filled with jewels, as well as a woman who has been impersonating Fallon. Jeff awakens the following day and learns that while celebrating, he and Nikki were married.
Krystle launches her new business with the purchase of an Arabian horse. Sexual tension between Steven and Luke mounts. Jeff and Nikki return from Bolivia with the news of their marriage and they move into the mansion. Alexis is intrigued with Blake's recent meeting with a delegation from China. It was arranged by Lady Ashley Mitchell, an internationally known photojournalist and widow of a wealthy British lord. Ashley and Blake share a kiss.
Blake refuses to include Krystle on a business trip. Alexis wants in on Blake's South China Sea oil deal. Dominique turns to Blake instead of Brady when her company is threatened. Amanda moves into the mansion.
Alexis attempts to persuade the head of the Chinese delegation to hire Colbyco. Blake is surprised that Lady Ashley is an Acapulco. Amanda has a romantic fling with Prince Michael of Moldavia. Claudia meets with Luke, asking him to honor Steven's request that they remain apart. Krystle makes a surprise visit to Daniel, who hurriedly hides maps and plans detailing a secret military maneuver. While riding, Krystle is thrown from her horse. Relieved she is unhurt, Daniel kisses her passionately.
Amanda spends the night with Prince Michael and then is heartsick to learn he is engaged. Dex persuades the Chinese delegation to use his company instead of Blake s for an important drilling job. Alexis offers Blake a generous deal in the South Seas. Although suspicious, he accepts. After Claudia spots Steven and Luke at a restaurant, she finally accepts Adam's advances. Daniel confesses to Krystle he's been in love with her for years.
Tensions between Krystle and Blake mount as their suspicions of one another grow. Claudia regrets sleeping with Adam. Dominique derails Alexis' attempt to buyout her company, but is unable to stop Brady's divorce proceedings. Alexis hires a private detective to investigate the circumstances surrounding Jeff's marriage to Nikki: She learns the girl fabricated the marriage license and deluded Jeff into believing he had married her while drunk.
Claudia flies to Mexico to divorce Steven. Unexpectedly, Adam appears at her hotel and they spend the night together. After Amanda embarrasses Prince Michael at Dominique's party, his patience is exhausted and he leaves her. Jeff's infatuation with Ashley grows. Dex rescues Daniel, who goes immediately to see Krystle. While airborne with Daniel on a private plane, the men fight and knock the pilot from the cockpit, throwing the plane out of control.
Blake and Daniel survive the plane crash. Jeff charters a helicopter and braves hazardous conditions to finally locate the wreckage. Dominique warns Ashley not to jeopardize Blake's marriage. Krystle and Blake finally clear the air and renew their commitment to each other. Amanda reconciles with Prince Michael, and the wedding is back on. Krystle visits Daniel and tells him he is the father of her sister Iris' baby, Sammy Jo.
Krystle accompanies Daniel to New York for his reunion with Sammy Jo, the child he's never known. While looking through photos Ashley snapped on assignment at a rock concert, Jeff is stunned to spot Fallon among the crowd. Steven's upset to see Luke having dinner with another man. Adam alters vital information on an urgent business wire to make Jeff appear incompetent. Correcting Jeff's 'error' at the last minute, Adam gains points with Blake.
As Alexis and Amanda emerge from an exclusive bridal salon, a car suddenly screeches to a halt and Amanda is pulled inside. A high-speed chase ensues. As Dex forces the kidnapper's car onto the sidewalk, Amanda breaks free. It is clear that Yuri, the Prince's chief bodyguard, is behind the kidnap plot. Steven requests Luke accompany him to Amanda's wedding. Adam and Claudia profess their love. Dex receives a telegram bearing tragic news.
Dex tells Krystle that Daniel Reece is dead. Steven is outraged when Sammy Jo decides to fight for custody of her son in court. Amanda and Alexis arrive in Moldavia and are greeted by Prince Michael and his father, King Galen. Jeff proposes marriage to Ashley. Sammy Jo learns that although she's Daniel's beneficiary, her monies will be held in trust with Krystle as executor. Finding former fiance Elena in Michael's arms, Amanda tosses her engagement ring at the prince and dashes out.
The families gather at a castle in Moldavia for the royal wedding, while Amanda threatenes to call it off. Sammy Jo schemes to gain control of Daniel Reece's estate. Jeff receives an answer from Lady Ashley.