Mitch rescues Cassie Cole, a popular TV talk show hostess who invites him to appear on her show. While on the show, Mitch saves the other guest, Jay Leno, from choking, and he becomes an instant overnight celebrity. The conniving Neely and Donna plot to use Mitch's sudden fame for their profit, pretending to be his agent and manager. Meanwhile, a few months after Stephanie's death, Caroline and C.J. adopt a stray dog swimming in the ocean that leads them to the dead body of its drowned owner. Naming it "Annie," the dog is surprisingly neat, responds to commands, likes to swim in the ocean, is drawn to Mitch, and will only sleep in Stephanie's old bed. C.J. then suspects Annie possesses the reincarnated soul of Stephanie.

Manny's past haunts him when two juvenile delinquents from his home borough in East L.A., Hector and Pulga, arrive at Baywatch for community service. Hector bitterly resents Manny for moving out of the neighborhood to escape gang life, while Pulga plans revenge against Manny and his mother for trying to help Manny escape. Meanwhile, thanks to Neely telling Cody about their relationship, Mitch and Samantha must reveal their secret romance to the rest of Baywatch. They also plan to give Hobie a car for his 16th birthday.