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. Alexis wants to marry Cecil at the hospital when he's better. Blake recovers and to help with finding the baby he goes on TV with the whole family, and says he's give a reward to the one who can find little Blake. Alexis also stand forward and tells about their son, Adam, who was kidnapped when he was a baby. In Montana, Michael Torrance suddenly is told by his dying grandmother, that he really is Adam Alexander Carrington.
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. She finally throws the baby over the edge, but it turns out it was only a doll.
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 Miranda. She and Michael meet, but without knowing they may be brother and sister. Michael seeks Blake but Blake rejects him when he says he's his son. Cecil and Alexis get married in the hospital, but Cecil dies a few minutes after the ""ceremony"".
Cecil leaves his estate and ColbyCo to Jeff and Alexis. He also reveals his ""Rhinewood-game"" in 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. Alexis believes him.
Alexis and Adam get good along in their mother-son relationship, and Alexis gives Adam a job in ColbyCo. Blake starts believing Adam is 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 gets a hold of Krystle's first husband Mark.
Blake tries to be friends with Adam, but Adam is rejecting. Alexis tells Mark that he's still married to Krystle. Mark seeks to get a job as a tennis pro at Fallon's hotel. Fallon is attracted to him, but she takes distance from him when she finds out he's Krystle's ex-husband. Jeff quits his job at ColbyCo and starts working for Alexis, and Adam does not like it. Joseph wants to quit his job at the mansion and go to his daughter, Kirby Alicia Aynders, in France, but Blake talks him into staying.
Kirby comes to stay with the Carringtons after breaking up with her fiancé in France. Joseph tries to persuade her to go back. Mark gets the job at Fallon's hotel. Blake tries to get help from congressman Neal McVane. Jeff and Adam has 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 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"". In the party Alexis sleeps with McVane and tries to stop him from helping Blake, but Blake gets the upper hand. Mark tells Krystle about their unfinished marriage. Fallon and Mark dances and falls in the pool where they start kissing. Adam comes on to Kirby and she tries to get away from him. Jeff rescues her and they end up kissing.
Jeff starts being dizzy and affected by the painting in his office. Joseph tells Kirby to stay away from Jeff. Krystle goes to Acapulco to find out what really happened when they had they so-called divorce. Blake comes after her to be with her and support her. They finish the case, the divorce will be legal, and Blake and Krystle's marriage will be valid. The oil rig Steven works on explodes.
Everybody hears about the explosion and it looks like Steven is dead, though Blake goes to look for him. Alexis follows Blake. Sammy Jo's father comes to Krystle to collect Sammy Jo's share of Steven's inheritance, but Krystle throws him out. Joseph comes to Jeff's office and tells him to stay away from Kirby. Jeff is infected by the toxic paint and attacks Joseph. Mark continues to contact Krystle, who tries to get him out of her life. Blake finds out about all the contact between Krystle and Mark and is jealous.
Alexis and Blake continues the search for Steven together with Dan Cassidy, who worked at the rig, and finds more signs of Steven being 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 reconciles with Krystle. Blake refuses to attend the memorial service Alexis has arranged for their son. Alexis seduces Mark. Sammy Jo, now preferring to be called Samantha, appears at the Carrington household with a baby. The child is Steven's son.
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. Alexis betters the offer and is also turned down. Krystle and Blake are overjoyed to learn Sammy Jo wants them to be Danny's adoptive parents. Alexis continues her affair with Mark. Steven, alive in a Singapore hospital with his face bandaged, regains consciousness. The doctor explains that severe burns incurred in the oil rig explosion necessitated plastic surgery.
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. Because Krystle's divorce from Mark is not yet finalized, Blake explains they must wait two months before adopting the child. Finding Fallon alone in Mark's hotel room, Jeff attacks his wife, calling her a whore. Mark arrives and rescues her. Concerned with his erratic behavior, Alexis decides to send Jeff away on vacation. Adam confesses to his mother that he's had Jeff's office painted with a lethal compound. He warns her that if she tries to remove it he'll implicate her in his scheme.
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. In his confused state Jeff signs over his son's shares of Denver-Carrington to Colbyco, and his own voting control to Alexis: Alexis is now in a position to control Blake's company. Jeff angrily confronts Mark on the tennis court, where he collapses and is hospitalized. Alexis worries the doctors will discover the poison in his system.
Alexis, concerned the doctors will learn the truth behind Jeff's illness, orders his office to be remodeled and the lethal paint compound removed. Mark and Fallon make love in Haiti; Blake learns Alexis is planning to orchestrate a Denver-Carrington/Colbyco merger to control both companies. Dr. Edwards, a physician who cared for Adam in his younger days, arrives in Denver to see his former patient, a one-time drug user. In the Singapore hospital, Steven's bandages are removed and he is handed a mirror. Blake is stunned to learn the hospital has found poison in Jeff's bloodstream.
Krystle suspects Alexis knows the reason for Jeff's illness and tells Blake, who is busy obtaining an injunction to prevent his ex-wife from taking over his company. Jeff is discharged from the hospital; the poison in his body still not identified. Mark and Fallon return from Haiti, and Kirby observes them kissing passionately in the mansion's entryway. Kirby fantasizes making love with Jeff. In Singapore, Steven's secretiveness continues to arouse Dr. Chen's curiosity. Blake receives a call from Singapore and learns Steven may have been found.
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. Jeff tells Alexis he was mistaken in signing over his stock and wants to retract the action; Adam lures Kirby to a hotel and attacks her. Jeff arrives to rescue Kirby and in a passionate moment, asks her to marry him. In Singapore, Steven tells his father he has broken from the family and will not return to Denver...until Blake tells him he is father to an infant son at the Carrington mansion.
Excitement brews in the Carrington household as-preparations are made for Steven's return. It is an emotional moment as Alexis, Fallon and Krystle embrace Steven, who is introduced to his brother Adam and son Danny. Jeff and Kirby are married in Reno; plans are underway to finalize the Denver-Carrington/Colbyco merger. Fallon and Mark continue their affair; Alexis confesses to Steven that she paid Sammy Jo to get out of Denver, and that she suspects Blake 'bought' little Danny from the girl. Steven heads to New York to find his wife.
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. After discussing the possibility of a reconciliation with Sammy Jo, Steven returns from New York alone. Blake disapproves of his son's plans to move out of the mansion with little Danny, but Krystle insists he let him go to prevent further alienation.
As the Board of Directors gathers to vote on the Denver-Carrington/Colbyco merger, Alexis pointedly tells the group that a nay vote will be met with immediate dismissal. The approval of the motion sends Blake into a fury. Kirby is upset to find Jeff and Fallon laughing together; Krystle comforts her, and also tries to patch up relations between Steven and Blake. Jeff accuses Adam of falsifying reports regarding Denver-Carrington; Alexis warns Fallon of Mark's history as a gigolo. Alexis learns Congressman McVane has managed to block the merger; outraged, she spills her knowledge of his scandalous past to the press.
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. Later. Fallon finds her mother in Mark's bed, undressed. Krystle arranges a dinner to improve relations between Steven and Blake; Alexis interferes and sees that Steven is out of town, unable to attend. Blake insists his absence is due to hostility and Krystle, incensed at her husband's insensitivity, storms off.
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: The two fall into the lily pond flailing and punching. Blake approaches and pulls them apart, likening the women to 'common mud wrestlers.' Humiliated, Krystle packs her bags and checks into La Mirage. Alexis demands Joseph drain the pond and retrieve the diamond earring she lost in the scuffle, and threatens to tell Kirby the truth about her mother if he does not cooperate. A ruined McVane appears in Alexis' office after hours and threatens to kill her.
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. Fallon meets with Adam's former physician, Dr. Edwards, who tells her of Adam's temper and underlines his brilliance: He once won a case by proving a plant worker was poisoned and driven insane by chemical fumes. Realizing the connection to Jeff's illness, Fallon asks the hospital to investigate. Alexis tricks Krystle into meeting her at Steven's cabin, where she offers her $1 million to leave Blake. Outraged, Krystle rises to leave, but the door will not open--someone has bolted it shut from the outside, and smoke is pouring in from under the door........
