When the fire marshal shuts down the Peach Pit After Dark for violating capacity, Steve suggests to Dylan and Nat about purchasing the building next door to expand. Unfortunately, Dylan is broke and the only one who knows it is Valerie who is pressured to keep it a secret. The next day, when the Walshes and Valerie are planning a weekend trip to Palm Springs, a fax from Dylan's bank arrives requesting Jim's signature on a mortgage loan that Dylan has taken out, leaving them confused until Valerie finally tells them that Dylan is penniless from Kevin and Suzanne's business scam. Jim then informs Nat, and then apologizes to Dylan for what happened to him, but Dylan is too far gone at this point and rudely tells off Jim and anyone else. Meanwhile, Kelly disapproves when her mother, Jackie, tells her that she wants to return to modeling, but becomes further incensed when Jackie wants to include Kelly's baby sister Erin as well. That evening, David and Clare find themselves in a binding situation when David handcuffs himself to Clare's bed and gets stuck, and soon finds himself alone when Clare has to go out to dinner with her father. Donna continues to juggle dating both Griffin and Ray. But then Griffin takes Donna on a whirlwind trip to Catalina Island with the plans to seduce her, she refuses and finally learns what a creep Griffin really is. Valerie comes to Dylan's house to apologize over losing all his money and they end up sleeping together again. The next morning, Steve and David (not yet aware that Dylan is broke) come over to Dylan's house to talk about the Peach Pit After Dark expansion and they both find Valerie in bed with Dylan. Steve draws the correct conclusion and responds by punching Dylan in his face.

Dylan's closest friends stage an intervention at Casa Walsh, where they beg him to enter rehab. Valerie and Clare, left out of the intervention, spend the day shopping together. Steve partakes in the intervention, but he is still angry with Dylan over his sexual tryst with Valerie and he still will not listen to Kelly or Jim or anyone else who tell him that Valerie is the really bad seed. Meanwhile, Kelly's modeling career takes an upward turn when she is offered the chance millions of girls only dream about: the opportunity to appear on the cover of the national fashion magazine Seventeen. Dylan runs away from the rehab clinic after one day with a little of Valerie's help, but begins to alienate her too with his self-destructive attitude and his unwillingness to go after the people who betrayed and stole from him, which leads her to finally walk out on him. Dylan's problems increase when he is given heroin by his pool hall dealer. That evening, Ray has dinner with Donna's parents Felice and John. Also, David and Clare's homemade video of their lovemaking disappears and turns up in the home of Donna's parents. However, Donna's father, John, sees the video first, but being a good sport, gives it back to Donna and makes her promise to keep her roommates under control. At the end, Dylan gets high while smoking heroin, and ends up crashing his car off a cliff.