Billy is depressed when the Melrose Times folds. He asks Alison to accompany him on a visit to his parents' house, then pleads with her to pose as his girlfriend. Billy tries to convince his parents that he is on the verge of becoming a successful writer, but is roped into helping run his father's furniture store because of a deal the two once made. He quits in a huff after his father questions his sales techniques, and later asks his dad to let him live his own life. Sandy gets a swelled head after landing a part in a horror movie, and ends up moving out. She comes down to earth after the director tries to insert nudity into one of her scenes. Michael injures himself at the apartment. He and Jane discuss their excitement and anxiety about the upcoming birth of their baby.

Alison continues to see Keith, despite the misgivings of her friends and the fact that her erratic behavior has put her job in jeopardy. Billy confronts Keith about his treatment of Alison. Matt is the victim of an attack outside a nightclub. When an officer from the hate crimes unit comes to the halfway house, Matt's supervisor is stunned to learn that Matt is gay. He quickly devises a reason to fire him. Jake and Rhonda convince Matt to seek legal recourse. A customer at Shooters asks Sandy to audition for a soap opera. She wins the role and moves to New York.