As Maggie is haunted by nightmares over her husband Richard's death, Angela surprises her friends and family with her calm resignation over losing control of the winery empire, while Melissa mercilessly wields her newfound power over everyone within her domain, down to the field hands and household help. As Maggie must take control over Richard's vast financial empire, she tries to cope with the agony of his murder by the underground group, The Thirteen. After leaving years ago after a dispute with her family, Pilar Ortega, not only the daughter of the vineyard foreman at Falcon Crest but also now a bank vice president, returns and provokes intense curiosity throughout the valley.

After Angela blackmails Nick with incriminating information about his past, Nick surrenders Falcon Crest to Angela. While Angela makes plans to rebuild the house, Nick regrets his deference to her and warns that he will not bend in the future. Nick decides to tell Ben the truth about his mother, which enrages the young man. Richard's newspaper prints the fact that Melissa had placed a phone call after Lance's departure, proving that Lance is innocent of her death. Richard warns Pilar not to let her affair with Lance interfere with Richard's takeover of the valley. When Frank's old friend Libby appears, Nick and Ben are surprised. Libby requests Frank to join her in Columbia to mine emeralds, which is an offer that disturbs Angela. As Emma and Cabot begin an intimate relationship, Cabot questions her true identity.

Maggie's rebuff of Richard's attempts at reconciliation cause unexpected results. Upon hearing news of the car accident, Lance and Pilar immediately return home. With Ben and Gabriel in serious condition, Anna feels guilty over having given Ben the car. While the hospital staff quibbles about accepting Gabriel, he goes into convulsions, requiring immediate surgery. Angela, though not approving of the marriage, invites the newlyweds to make their home at Falcon Crest. In response to Maggie's rebuff, Richard pressures a judge for a court order that transfers custody of the boys to him. Accompanied by the Sheriff, Richard removes the children from Falcon Crest.

As Pilar and Sinclair plot against Richard, Samantha and Richard continue to scheme against Angela, while Nick Agretti investigates the background of a forged document. When Lance discovers one deed too many in Angela's safe and burns the document, he is unaware that he has been observed by Pilar, who has joined forces with Sinclair to undermine Richard in his upcoming investigation by the S.E.C. Richard misunderstands Tommy's presence in Maggie's hotel suite. Samantha helps Angela to escape from one of Richard's ploys.

Having successfully frustrated Richard's plans by marrying Frank Agretti, Angela returns to Falcon Crest, where her family rallies to her side and plans are devised for Richard's total downfall. When Samantha returns to Chicago from Paris, Richard tells her to forget their association or she will have to pay consequences. Nonetheless, when Samantha arrives at Falcon Crest, she provides evidence that Richard was involved in Angela's kidnapping. Consequently, Pilar and Angela work with the S.E.C. to facilitate Richard's financial ruin.