This great soap opera begins with a flashback to a party in honor of Channing Capwell Jr. in Santa Barbara, California in 1979. Channing and his older brother, Mason, are entertaining the guests until the butler, Phillip, gives Channing a note. Channing asks the maid, Santana Andrade, if he'll see her tonight. He then follows instructions to go to the Capwell study. When Channing enters the study, it's clear that someone was waiting behind the desk. The person points a gun and pulls the trigger. Seconds later, Channing is lying dead on the floor. ""Santa Barbara"" then cuts five years ahead in time to the San Quentin prison on July 30, 1984.

It's obvious to Peter that Kelly is thinking about Joe Perkins. Joe gets off the bus and is reunited with his mother, Marisa, and his sister, Jade. The mysterious woman growls, ""Damn! He's back."" Joe is disappointed because his father didn't show up. Marisa is happy to have her Joey back. When Rosa Andrade gets the gun away from Santana, the gun falls to the floor. Mason Capwell puts his foot on the gun, preventing Santana from picking it up. Mason asks Santana why she brought the gun to the bus station. Santana admits that she thought about shooting Joe, but adds that she couldn't have done it. She then starts to cry, and Mason comforts her.

Mason tells Santana that two people saw her with the gun yesterday. He reminds Santana that she had no permit to carry the gun. ""I'm here to help,"" Mason smiles. Santana doesn't trust Mason at all and decides to talk to a lawyer friend. Rosa feels betrayed by C.C. and decides to confront him. She wants to know what happened to Santana's child. C.C. claims he doesn't know and denies that he forced Santana to give up her baby. Rosa thought C.C. trusted her. After all, she started working for C.C. twenty years ago and mothered his children when his wife passed away. C.C. explains to Rosa that he had dreams for Channing and imagined that one day maybe Channing might even be president.

Someone is making a bomb. Santana is about to take a bath when she spots Mason. Naturally, Santana becomes upset and gets Mason to leave. Kelly sees Joe, and Peter notices how if affects her. He thinks something should be done about Joe. C.C. arrives with two thugs, and Joe gets thrown into the water. Thanks to a carrier pigeon, Ted receives a note from Danny and learns that Danny wants to go to Hollywood. Jade pays a visit to the restaurant Danny is working.

Laken has a romantic fantasy about Ted. John goes home and is shocked when he sees what happened to his house. Worried about his daughter, John wants Jade to stay with him. Jade refuses to make a choice between her parents, though. At the warehouse, the stranger informs Joe that he's the one who called the fire department tonight after the explosion. Joe reveals to the stranger, whose name is Dominic, that he found Channing dead with a guest at Channing's big party. However, the witness never came forward.

Joe & Kelly argue on the yacht, Peter comes in with a gun, Santana leaves for Acapulco.

Ted & Danny arrive in Hollywood, Santana talks to the doctor who delivered her baby, Peter gets hurt at polo.

CC has a cocktail party and calls Mason Channing, Joe convinces Jade to take a vacation.

Kelly reads some of Joe's letters, Jade arrives in Hollywood, Santana back from Acapulco.

Santana hires a private investigator, Augusta offers Joe a job, Joe breaks into the Capwell house.

Cruz arrives to help with the oil rig fire, Kelly asks Peter if he wants to move to New York.

Cruz in the hospital, Santana finds out her private investigator is working for CC, Dominic arranges a meeting for Kelly & Joe.

Peaches gets her purse stolen, Laken arrives in Hollywood, Joe & Kelly meet at the stables, Joe goes to work for Augusta.

Cruz goes to the Capwell house to rest, Peter and Augusta chat about old times.

CC has a party on his yacht, Augusta tries to blackmail Peter, Joe breaks into the Capwell house again.

Cruz helps Joe get out of the house, but Joe gets caught by Kelly.

Kelly helps Joe get out of the house, Santana brings CC a present to give to her son.

Kelly sees Augusta & Joe while riding her horse, cuts herself on the fence, Joe kisses Kelly, Cruz & Santana look at the houseboat.

Joe kisses Kelly (replays), Jade has a screen test with a sleazy producer, Joe gets drunk and goes to Augusta's, Kelly goes to Peter's.

Morning after - Joe & Augusta wake up together, as do Peter & Kelly, Laken wants to go to Hollywood.

Augusta follows Joe, Dominic tells Joe to stay away from Augusta, Joe goes to see Santana.

Joe & Santana argue at the stables, Mason & his secretary get it on in his office.

A sarcophagus arrives at the Lockridge house, Santana out cold after falling off a horse, Lionel arrives in Santa Barbara. **First appearance of Nicolas Coster (Lionel Lockridge).

Santana gets bitten by a rattlesnake, CC rescues her and she is taken to the hospital.

Danny goes to rescue Jade from the sleazy producer, Augusta cooks Laken's pigeon, Joe gets in Dominic's trunk to follow him.

Laken upset, goes to the Capwell house, Dominic goes to the cemetery, Joe figures out Dominic is his witness.

Lionel goes to the Capwell house to get Laken, Joe takes a gun and goes to meet Dominic.

Ted & Laken leave the Capwell house and go to a motel, at the warehouse Dominic admits to Joe he is Joe's witness.

Ted & Laken at a motel, Mason searches the Lockridge house, Kelly meets Joe at La Mesa.

Kelly and Joe dance at La Mesa, Peter arranges for the two-way mirror to be installed in the presidential suite, Jade in trouble at the movie shoot.

Kelly and Joe meet at Cruz's houseboat, Danny saves Jade from the sleazy producer.

Joe and Peter fight at Cruz's, Augusta and Lionel create their circle of truth, David Hasselhoff cameo, Kelly goes to see Joe at Cruz's and gives him the ring back.

Peter tells Mason that Kelly has seen Joe a few times, Ted & Laken return to Santa Barbara & invite their parents to the snack bar for a meeting, Joe sends Kelly flowers with the ring. **Last appearance of Peter Mark Richman (C.C. Capwell)

Ted & Laken meet their parents at the snack bar, Peter & Kelly fight and she leaves, Santana tells Cruz she & Channing used to meet at the gazebo. **First appearance of Paul Burke (C.C. Capwell)

Kelly missing, Dominic breaks into Santana's apartment and steals her letters, Dominic goes to the gazebo.

Joe finds Dominic at the gazebo, they find Santana & Channing's letters, Lionel watches Augusta & Peter in the presidential suite.

Peter records Mason and Veronica talking in the presidential suite, Cruz finds out from Joe about Santana's baby.

Auction for the Lockridge beachfront property starts, CC takes Santana for a plane ride, Kelly returns to Santa Barbara.

Bidding for the property starts - Mason wins, Dominic and Joe each visit the Yucca Dunes Motel, Gina & Brandon arrive. **First appearance of Linda Gibboney (Gina DeMott) and Scott Curtis (Brandon DeMott)

Kelly goes looking for Joe, Veronica juggles Lionel, Peter & Mason, CC offers Cruz a full-time job on the rigs.

Joe takes Kelly to meet Dominic, Ted, Laken, Danny, Jade look at renting the motel for a hangout, Santana meets Gina & Brandon.

Ginger and her thugs show up at Peter's and blackmail him, it's revealed Dominic is a woman, CC and Santana make love.

Kelly's dressmaker turns out to be Ginger, Danny has a soccer match, Mason says CC slept around a lot before he met Sophia.

Joe goes to Alaska to find out info on Dominic. **First appearance of Jonna Leigh Stack (Summer Blake)

CC's birthday, Peter plants drugs on Joe's bike, Eden flying on her way to Santa Barbara. **First appearance of Marcy Walker (Eden Capwell)

Eden parachutes onto the Lockridge property, CC hears the tape of Mason trashing him, at the sanitarium in Alaska Joe learns Dominic is a woman, Eden and Cruz "meet".

Warren burns some things at a storage locker and injures his hand, the cops find the cocaine on Joe's bike, Veronica denies it's her voice on the tape, Kelly moves out of the Capwell house.

Cruz tells CC he knows that Santana's baby is Brandon, Ginger tells Joe about Peter's past, Eden & Cruz meet at the cemetery, Lionel gets drunk and goes to Sophia's grave.

Dominic confronts Lionel in his car, Augusta tries to get Warren to confide in her about the fire at the pawn shop, the cops go to La Mesa to arrest Joe, Joe later escapes towards the ocean.

Lionel dreams of Sophia/Eden, Joe is presumed killed by sharks, Ted & Laken get "married" in class, Warren admits to Augusta he stole the things from the Capwell house.