At Fairwinds, Paul has returned home to find Rosanna and Craig toasting to "dreams coming true!" Rosanna tells Paul that Craig just "popped in" but Paul is not amused. Paul asks Craig why he is there. Craig tells him the he has an ulterior motive; he wishes them a happy marriage and hopes to convince Rosanna to drop the suit against Montgomery Enterprises. But Rosanna tells him no and Paul tells him leave, which he does. With Craig gone, Rosanna wants to go on with sampling the champagne for the wedding, but Paul tells her he wants to sit down and talk to her. Rosanna nervously asks if it's something bad. He tells her he doesn't like Craig showing up when ever he feels like it. Relieved, Rosanna agrees. Paul wants to talk to Craig about it, but Rosanna tells him that is not a good idea and now that Craig knows that she won't unfreeze his assets he has no reason to bother them anymore. Paul is not convinced.
Meg arrived at the room at the Lakeview and prepares to take a pregnancy test. She is horrified when the test is positive. She is staring at the test in disbelief when Holden calls and needs her help at the farm preparing for Luke to come home. She hesitates, but agrees. She throws the test away in the trash but in her haste drops the receipt on the floor. She rushes out to the farm.
Craig arrives back at the room looking for Meg but instead finds the receipt. He quickly finds the pregnancy test and is delighted. He calls Meg, but she doesn't answer. He leaves an excited message telling her to meet him at the Lakeview lounge. He then calls Rosanna who angrily scolds him for bothering them and starts to hang up, but he tells her he won't be bothering her anymore and for her to come to the Lakeview lounge in an hour and see for herself; and be sure to bring Paul.
Rosanna tells Paul that they must meet with the wedding planner at the Lakeview in an hour, but Paul tells her he has things to do and can't go. Rosanna is upset and wants him to come with her so Paul finally agrees.
Meg arrives at Emma's to help Holden. He tells her that Luke will be staying at the farm with him and that Lily will be home with the kids. Meg asks why and he tells her because that's what he wants. Meg is alarmed to learn they are separated and wants to know what happened, but Holden doesn't want to talk. He tells her marriage is tricky, which she agrees. Holden asks her to take care of Ethan for an hour while he does errands. She tries to say no and is very nervous as he puts Ethan in her arms. She finally agrees and Holden leaves. Alone, she confides in little Ethan that she is going to have a baby. She tells him she hopes she has one just like him. She wonders aloud what she is going to do. Holden arrives early and Meg leaves to meet Craig.
At the Lakeview Craig happily greets Meg. The waiter brings champagne. Meg tells him that she isn't in the mood to drink. He tells her he knows why and that she needs to cover her tracks better if she is going to keep secrets from him. She denies knowing what secret he is talking about but Craig, seeing Paul and Rosanna arriving, pours a glass of champagne and tells her he is sure she was planning a big surprise for him. Meg realizes that he knows about the pregnancy and wants to go back to the room. She doesn't see Paul and Rosanna in back of her. Craig stands up and announces to the room that his wife is pregnant. Everyone claps and Meg turns around to see Paul standing there. Craig ordered champagne for the house. He offers some to Rosanna and Paul storms out. Meg angrily told Craig that he shouldn't have done that. Craig tells he is happy he and wanted to celebrate. He leaves to go pay the bar tab. Meg then gets a text message from Paul telling her to meet him in Olde Town.
Meg tells Craig she knows his heart is in the right place but she didn't have time to tell him today because she has a job interview this afternoon and leaves for Olde Town.
Rosanna asks Paul if he is alright. He tells her was rattled by Craig's display. Rosanna said that the news is lovely- but Paul disagrees. She asks him if he thinks Meg will be a wonderful mother. He asks where the wedding planner is and she leaves to go check. Rosanna tells Paul that the planner will be delayed for a while. Paul tells her he doesn't want to hang around watching Craig, so she tells him to go home and she will meet with the planner. They kiss goodbye and he leaves.
Craig tells Rosanna that he held up his end of the bargain; she needs to keep hers.
In Olde Town Paul asks Meg if it is true; she tells him she is having a baby. He asks her if it is Craig's.
Carly tells Brad that because she and Jack slept together, he and Katie will be through forever. Brad doesn't buy it and regrets being involved. He sticks up for Katie and tells Carly that Jack slept with her because he thought she was dying. Brad tells her that he is ending this tonight; Jack needs to know the truth. Carly tells him not yet; Brad asks her when. She tells him she is waiting for Jack to ask her to marry her. He reminds her that he is married, but she tells Brad that he can mend Katie's broken heart. Brad is angered by her total disregard for Katie's feelings. Carly reminds him that is involved with this deception also and that she will tell Katie this. Brad knows Katie would hate him. Carly tells him that in the end everything will be the way they want it.
At the Lakeview lounge Katie just learned from Jack that he slept with Carly. Katie is horrified; Jack has few answers for her. Katie demands to know why he did this. Jack tells her he doesn't know, but she tells him she knows that Carly is the one that made this happen; she was the one that dragged him to Montana and he felt sorry for her. But Jack told Katie that he needed to go to Montana and that it was his way of saying goodbye to Carly. Katie told him that he just threw away his marriage vows. Jack tells her that she has every right to be mad at him, but to not blame Carly. Katie tells him that he will never let go of Carly. She tells Jack that she loves him, but won't stay married to someone else's husband. Jack tells promises her that nothing like this will ever happen again and that he can't lose her. She tells him that she believes him. He tells her that they just need to get through the next couple of months. Katie tells her that she can't and they need to let it go. Jack pleads with her; they can still make this work. But Katie questions how they can make this work when he is living with Carly, making love to Carly and being more of a husband to her. Katie tells him that she wants someone that is all hers. Jack tells her he still can be. Katie reveals to him that when he was hurt in the warehouse and she was holding his hand he said "I love you- Carly." Jack said that he was not in his right mind, but Katie told him that he was telling the truth. She said goodbye and left.
Brad tells Carly that he doesn't know how he can do this to Jack, but Carly told him that Katie will need a friend- so be there for her. But before he can respond Jack arrived and told them that his marriage to Katie was over. Brad offers his support to his brother and leaves. Carly asks how Katie is; Jack tells her she is wrecked. He tells Carly that he told Katie about what happened in Montana. Carly tells him she is surprised he told her so soon, but Jack said that if he had waited it would have been worse. He said that if he and Katie are going to be together, it can't be because of a lie.
Jack laments that he has hurt Katie. He doesn't know how to live with knowing how much he hurt her. Carly tells Jack that she pushed him over the line, but he tells her it's not her fault. He does love Katie, but for as long as Carly is alive they are tied to each other. He wishes they have more time. Carly tells him that maybe they do. Jack said he won't let her pretend she is going to be ok so that he will get back together with Katie, and no matter what happens between Katie and him he will be there as long as she needs him. Later, he asks Carly how she feels. She tells him that she feels better than before she got sick and as far as she is concerned she already got her miracle.
At Al's Katie finds Tom and Margo. She tells them that she needs Tom's help and wants an annulment. Margo asks if they had a fight, but Katie tells them that they never lived together and this should be grounds for an annulment. Tom told her he would get started on it right away. He leaves them alone. Katie tells her that Jack slept with Carly. Margo tells her that even though this is awful, there must have been extenuating circumstances. She tells Katie that Carly and Jack have a long history, but Katie is his wife. Katie said that she thought Jack was the one person she could trust. But she realizes that during their entire time together Jack was still in love with Carly. Margo begged her to not make a decision tonight, but Katie told her that there was nothing left to hope for and leaves.
Katie arrives at WOAK and Brad is surprised to see her. He tells her that he heard what happened and asked how she was doing. She tells him that started the annulment processes. Brad tells her that she should give it time- Katie told him to give her one thing to make her change her mind and stay married to Jack. Brad tells her that she shouldn't always feel second best to Carly. He starts to tell her there is something she should know, but Katie starts to cry and asks him to hold her and that she doesn't know what she would do without him.
At Al's Lily runs into Holden as he orders food for Luke. She tells him that he is turning the family upside down just to punish her. She tells him that Luke needs them both. Holden tells her she can come to the farm anytime she wants to be with Luke; but they need to not fight in front of the kids. Holden paid for the food and walked away leaving an upset Lily. Dusty approached her and asked her if there was anything he could do. She fell into him arms for comfort as Holden watched from outside.
Sitting down together, Dusty gives Lily herbal tea to help her relax. She tells him it is good to have a friend. He said he doesn't want to make things worse for her, but she tells him that Holden seems possessed. Lucinda shows up and comments on how "cozy" they look. Lucinda tells Lily that she found a new physical therapist for Luke and she should leave now to go support Luke. Lily realized that her mother was trying to get rid of her and leaves. Dusty comments on her subtleness- and Lucinda tells her that's about how subtle he was, having tea with Lily. He tells her he is being a friend- but Lucinda tells him that true friends know when to back off. Lucinda tells him that Lily's marriage is in trouble and that he is a factor and should back off. Dusty agrees and tells her that he is going to give Lily all the space she needs.
At Emma's Luke asks Faith if his mom would be coming there later but Faith nervously told him she didn't know and tried to skirt the issue, but Luke told her to tell him the truth. She tells him that their parents had been fighting for weeks since Lily bailed Dusty out and Holden blamed her for Luke's injury. Faith told Luke that Holden moved out and that's why Luke was there at the farm. Faith told him to face it; their parents were splitting up.
After returning to the farm, Luke asked Holden if his moving out of the family home was permanent. Holden tells him that being at the farm is the best for him recovery, but Luke is not buying it. Holden tells him that Lily knew that Dusty suspected Colonel Mayer of killing his wife and if she had told him none of this would have happened. Just then Lily walks in to hear what Holden is telling Luke.
Outside Lily is outraged that Holden told Luke this and fears he will now blame her. She told him that he can be as angry as he wants- but to not come in between she and her son.
Back inside, Luke is silent. Lily tells him that if she contributed to him being hurt she could never forgive herself, but Luke tells her it's not his fault. Luke fears that his injury will cause more problems between she and Holden. Lily hugs him and tells him that it's not his fault they are having problems.
Back inside Holden tells Lily that Natalie and Faith were going to spend the night and he wants to take Ethan too. Lily tells Holden that she wants to stay for Luke's physical therapy, but he tells her not to; Luke doesn't need her hovering over him. Lily kisses Luke goodbye and leaves.
Luke tells Holden that he shouldn't have made her leave like that. He tells his father that he is being a complete jerk. He tells him that he doesn't blame his mom for this happening, so why should he? He asks Holden if there is something else he can't forgive her for. Holden tells him that he and Lily have been having problems for a long time, way before this happened. Luke tells him that the most important thing is their relationship; they must make up before he loses her.
In Olde Town, Lucinda runs into a very upset Lily. She tells her how Holden just humiliated her in front of Luke. She tells her their marriage over the years has been tested; but she doesn't think they can get through this.
At the Lakeview a flustered Lily drops her papers and Dusty is there to help her. She tells him he is always there when she needs him. They grab hands and Dusty tells her that she shouldn't be around him right now, but Lily begins crying. She tells him that she feels she is losing everyone she cares about and can't lose him too. Sobbing, she asks him what she is going to do. He takes her under his arm and they walk to the elevators. In Dusty's room he gets her a drink. Dusty tells her that Lucinda told him to stay away from her and she should go home to Holden. Lily said that Holden didn't want her and that she really needs a friend tonight.
In Olde Town Paul asked Meg if she got pregnant on purpose. She denies this saying that she wasn't even sure she could get pregnant. He asks her how she could let Craig do this to her, but she told him that he is still her husband. Paul told her that she will have to live with this choice the rest of her life. Meg tells him that she doesn't want to have a baby with Craig and points out to him that she slept with him too and the baby could be his, but Paul doesn't buy it. Paul reminds her of what they did to protect Jennifer from Craig and what a monster he is. He tells her that Craig is an animal and is using Meg to create another one and will never let her or his child go. Meg tells him she will leave Craig, but Paul tells her that he destroys everything he touches and she and the baby are next. He tries to leave but she grabs him and tells him they can find their way through this. Paul tells her that the moment she decided to have a baby with Craig she gave up a future with him. He tells her he is marrying Rosanna; she is his future and Craig is hers.
At The Lakeview Craig angrily tells Rosanna that she must hold up her end of the bargain and drop the lawsuit. Rosanna asks him what he will do if Meg didn't want to have this baby with him. He accuses her of being paranoid, but she tells him that Meg is impulsive. Rosanna tells him that she won't give him control of Montgomery Enterprises until Meg has the baby. Craig tells her that if she doesn't drop the suit he will tell Paul about their arrangement. He demands she call her lawyer and have the suit dropped today and storms out. Rosanna picks up her cell phone to make a call.
Craig finds Meg alone crying. She blames it on the hormones, but Craig tells her that she needs to tell him the truth. She admits that it was Paul that got her upset. She tells him that while she was waiting for her job interview, Paul saw her and was upset by the news of her pregnancy and told her that Craig destroys everyone he loves; especially his children. Craig tells her that nothing will happen to her or this child because. He tells her that he has made terrible mistakes in the past- but he has changed. Loving her changed him and he wants this child to be a new beginning for both of them. He takes her hand and she leaves with him. At Al's Craig has ordered all kinds of foods for Meg and fusses over her. Meg comments on how sweet he is being to her. He tells her that he is going to prove that Paul is wrong about him- he is going to give her and the baby all the love and support they will need. He then tells her that Rosanna dropped the lawsuit. Meg is surprised and wonders why. She asks him if he threatened her. Craig admits he did talk to Rosanna and that she seems really happy for him and her. He asks Meg if she was having second thoughts about running the corporation or about their future together. Meg remembers Paul's words of how he didn't care what she does now and that he is marrying Rosanna. Meg tells Craig that if they are having a baby together they should be committed and that's what she wants to do. Craig gives her his vow to be a good father and husband.
At Fairwinds, Paul hears Rosanna on the phone. He asks her who she was talking to and she tells him that she has decided to drop the suit against Montgomery Enterprises. Paul is outraged and wants to know what is going on with her and Craig. Rosanna tells him that she just wants for them to all move on, but Paul tells her that Craig must have something over her. Rosanna asks him if he is upset because Meg is pregnant with Craig's child. Rosanna tells him that she is glad that Meg and Craig are having a child because they will be too busy to bother them. Rosanna admits she is jealous of what he and Meg had; and she has good reason to. She tells him that in order for their marriage to be successful, they need to be honest. She asks him if he still has feelings for Meg, but he tells her he made a commitment to her, loves her and they are getting married. Rosanna asks him how they can get married when he's not over Meg. Paul tells her that he is over Meg, but Rosanna tells him that he will always have feelings for her. Rosanna now crying tells him that maybe he hates Craig because he has what Paul wants. Rosanna tells him that he will never be able to love only her; and she won't share him with anybody else. She tells him the wedding is off and leaves.
Paul calls Rosanna and is upset to know she is driving since she hadn't since the accident. He tells her to come home, but Rosanna refuses and tells him she doesn't care anymore. Suddenly there is the screech of tires and she hangs up.
Still driving, Rosanna looks in her rearview mirror; she thinks she sees Craig and becomes disoriented. Paul is trying to catch up to her but she drives out of control ahead of him. Paul runs to her car, but she is unconscious. Paul wakes her and she starts crying. He tells her that he can't lose her again asks her to marry him. She cries that she will. He tells her that she is the only one he wants and they kiss.
Will asks Alison to do him a favor. Gwen sees Iris with Sofie, and is angry at Iris for trying to get Sofie to leave Oakdale. Gwen is furious and Iris senses Gwen is keeping something from her. Will gets Gwen away from Iris and gives her a locket. Gwen tells Will something is wrong. Maddie informs Henry that she has to make a decision and wants to transfer to Wesleyan. Noah wants to help Luke recuperate and Maddie interrupts a close moment between them. Maddie says goodbye to Luke, and Noah admits to Luke that he kissed Maddie. Noah doesn't know if Luke can forgive him, and Luke asks for some time. Vienna mentions having children to Henry who says he'd love to - one day, not right now. Henry says goodbye to Maddie. Lucinda agrees with Luke that Holden and Lily should try to work things out. Lucinda tells Holden that Dusty will no longer be a problem. In Dusty's room, Lily spills wine on herself and puts on Dusty's robe. Holden finds out that Lily is in Dusty's room and sees a dizzy Lily lying in Dusty's bed. At the bar, Holden bumps into Emily and tells her that Dusty is upstairs with Lily.
Gwen tells Will she has cramps and Will calls the hospital. After Barbara hears from Will that Gwen's going to the hospital, she asks if Alison wants to go with her. Gwen finds out she can never have a baby. Emily asks Holden if Lily and Dusty are having an affair. Dusty sees Emily, and says he owes Emily an explanation. Emily doesn't accept Dusty's apology, says it's all in the past. Dusty doesn't understand why Emily is being so blasé. Meanwhile, Alison bumps into Chris Hughes. Later, Alison and Dusty see Emily and Chris kiss. Emily and Chris explain how their relationship started. Alison deals with Emily and Chris being a couple. Lily tells Holden she didn't sleep with Dusty, but he says it doesn't matter. Holden says he doesn't see why they should stay together. Dusty tells Lily that Emily is now with Chris Hughes. Later, Lily reveals to Dusty she no longer has a husband, and he comforts her. Holden admits to Ethan that he misses Lily.
At the hospital, Craig finds a nurse and asks if she's seen Meg, saying she's there for a prenatal examination. As Craig bubbles over with joy about Meg's pregnancy, Meg walks up behind him and asks, "What the hell are you doing here?" She asks that he please stop making everything be about her pregnancy. After her appointment, Craig waves a white flag, and Meg tells him everything was fine with her and the baby, but he has to stop trying to micromanage her pregnancy, or she'll never make it through the next 8 months. Craig leaves and goes to visit a realtor, looking for a mansion to buy, complete with a nursery.
Barbara and Paul stop by Will and Gwen's to check up on them. Gwen is still in bed, and Barbara goes to speak to her. Paul gives Will his condolences about the failure of the in vitro, and Will says he doesn't think he and Gwen will make it to Paul and Rosanna's wedding. Meanwhile, Barbara suggests to Gwen that she and Will adopt, because a baby is just what their family needs. Will overhears and takes her outside the bedroom, telling her she can't make this about having a baby in order to heal their family, to replace what they've lost with Jennifer and Johnny. Meanwhile, Paul tells Gwen she's an inspiration because she's given Will the family he's always wanted and needed. As Barbara and Paul leave, Maddie arrives. She tells Will and Gwen how sorry she was to hear about the in vitro, and they tell her that Barbara wants them to adopt. Maddie thinks that's a good idea, saying biology is overrated, considering what happened in her own family with her "psycho sister." Then Maddie tells them that she's decided to go to Wesleyan and that she can transfer right away. She hates the timing, saying she feels like she should stick around to help Gwen, but Gwen says she can help by going to Wesleyan and "kicking some serious academic butt." Maddie tells them that if they could make her feel like she belongs, imagine how they can make a child feel. They hug, and Maddie leaves; Gwen tells Will she thinks they should go ahead and adopt. They call Barbara to tell her. Barbara is shopping in Old Town with Paul and is thrilled to get the call; she tells them she has a good friend who works for an adoption agency, and she'll call her right away. She tells Paul the news, and he says he's got to go book a surprise honeymoon trip for Rosanna while she makes her calls. Meg walks by and sees them together.
Barbara brings her friend from the adoption agency, Ann Reynolds, over to Will and Gwen's place to meet them, explaining that Ann is leaving for vacation soon but said she'd come by to get the adoption paperwork rolling. After Barbara tries to help Will and Gwen address Ann's concerns about their age and lack of college education, Ann asks her if she can give them a minute alone. Barbara says she'll leave to go help Paul with the wedding plans, and she walks out. As Barbara walks out, she gets a call from Rosanna, who is frantically looking for Paul. Barbara tries to calm her down and tells her she'll go back to Old Town and find him and have him call her. Meanwhile, Meg has stopped Paul and asked him to please talk to her, but he is cold to her. She tells him this baby can't keep her from loving him, and she asks that he not treat her like she doesn't exist. Barbara walks up and interrupts, telling Paul that his fiancée is trying to reach him. Paul leaves, and Barbara reminds Meg that Paul is marrying Rosanna tonight; when Meg says she still cares for Paul, Barbara says she needs to leave Paul alone and focus on the baby she's carrying, because the baby will need all her devotion to survive having Craig as a father.
Back at Will and Gwen's, the adoption process comes screeching to a halt when Ann finds out that Will has a criminal record and was sent to a state mental institution.
At Carly's house, Carly gives Jack a shoulder and neck massage to try to help him relax, because he's tense about Katie. Jack comments that her hands seem so strong, and Carly says she told him Montana had worked wonders for her. Jack wants to call Dr. Evers and tell him about her "remission or whatever it is" or call another doctor to find out what's changed, because something definitely has. Carly asks him not to, but when she tells him there's something she should have told him but wasn't quite sure how to say, Jack thinks that means that she's afraid this is some type of "final rally" before she dies, and Carly goes along with that.
At the diner, Katie tells Henry that her marriage to Jack is over, saying he slept with Carly and she's having the marriage annulled. Henry points out that Katie slept with Simon while she was still married to Mike, and Katie says Mike was the one she really loved. Henry suggests that perhaps Carly is Jack's Simon, and it's Katie he really loves. Katie decides to call Jack, and she asks if he can meet her at the diner right away; he says of course, and he tells Carly. Before he leaves, Carly tells him that any woman who would let him go has got to be the biggest fool in the world, and she wishes him luck. After Jack leaves, Sage and Parker come home, talking about Halloween and a party they're going to later on. Carly offers to put some makeup on Sage, but she's very distracted, almost putting lip color on Sage's eyes. Parker says he needs to go back to the farm to pick up part of his costume, and Sage asks if he'll bring her a large cookie from Al's on his way home; Carly tells him to go ahead and to please bring her some of Vienna's Swedish soup.
At the diner, Katie tells Jack she has the annulment papers, and the only way she'd change her mind about signing them is if Jack can agree to at least spend the nights with her; he can visit Carly and the kids as much as he needs to, but she thinks he should move out of Carly's and spend his nights with her. Jack says he's afraid that might make Carly take a turn for the worse, and Katie says she understands, but in that case, she wants him to sign the papers. Dejected, Jack does so, and as he stands up to leave, he tries to kiss Katie, but she turns her face away. As he leaves, Katie stops him, then takes off her wedding ring and gives it back to him. After Jack leaves, Parker arrives and comes over to say hello. He notices she's not wearing her wedding ring, and she tells him it just wasn't good timing for Jack and her. Parker says he wants Katie to know that they all really like her, and she says she knows that. He leaves and takes the food back to Carly's; Jack is there, too, and Parker tells him he saw Katie without her ring and that she told him they weren't married anymore. Sage asks if that means Jack and Carly can get married again, and Jack says it means he's not going anywhere anytime soon, but they need to go get ready for their party. After they go upstairs to change, Carly says maybe Sage has a point, and the best gift they could give their family during "this difficult time" would be if they remarried.
Katie goes to WOAK to work; a package comes from her, and when she opens it, she finds her wedding album.