Michael reacts to the sight of blood in Isabella's apartment, and calls 911. Detective Weber arrives and begins questioning Michael's whereabouts. Michael informs Weber of his alibi. Weber asks Michael who would want to harm Isabella, and he mentions Paul, Mary, and Lynne, but not Christine. The crime scene investigators determine that Isabella's money and purse were left behind, and her body was most likely dragged out of the apartment as well. Paul is frantic as to Mary's whereabouts. Lynne fears that something's very wrong. When Mary does return, Paul notices bruises on her arms. Mary explains that a gang of teenagers mugged her. Weber shows up to speak with Mary and Paul, announcing that Isabella is missing and presumed dead. Liz informs Brock that Kay is also Jill's mother, leaving him distressed about Mac. Raul questions Brittany about her job interview, but Brittany evades the answer, saying she needs time to think things through. Jill forces her way into Mac and Billy's honeymoon suite, imploring Billy to listen to what she has to say. Billy refuses, and Jill blurts out why Billy and Mac cannot consummate their marriage. Billy calls John, and he confirms that everything Jill said is true. Billy is torn over what to do, as Mac enters from the bathroom ready to have sex.
Billy regretfully tells Mac that they can't have sex because Kay is Jill's birth mother. Mac is stunned to learn that she and Billy are cousins. Realizing that she can never be with the man she loves, Mac leaves. A frustrated Jill returns home, and intensely demands that Kay reveal if she's really her mother. Liz consoles Jill, trying to persuade her to start a new relationship with Kay. Jack divulges information to Phyllis that he's preparing for a very big meeting the following day with department store managers. Phyllis suggests he trots out Damon Porter at the meeting, and Jack considers it. Later, Phyllis runs into Damon, and learns that he's under a short-term contract. Dru surprises Neil with a wonderful sensual massage, and he's certain their relationship with be successful this time. Michael informs Diane about Isabella's disappearance, and Diane asks if he mentioned Christine as a suspect to the police. She insists that Christine was the one person Isabella was most frightened of, but Michael insists Paul has a motive. Weber questions Paul, Lynne, and Mary about their alibis earlier that evening. Mary is belligerent and uncooperative, prompting Detective Weber to take her down to the station. Lynne calls John Silva. Paul is relieved that Christine isn't involved, but wonders where she is.
Mac was huddled under a blanket in the loft, obviously having spent the night alone and crying. Brock came to see her and offer her what comfort he could. Unfortunately, he couldn't tell her the one thing she wanted to hear: that she and Billy were not really cousins; it was just a lie Jill made up to keep them apart. Brock told Mac that she was strong and would get through this. She had never backed down from a challenge. She said that what she wanted to do was leave town for a while. It was too painful for her in Genoa City. Brock told her that she was always welcome in Louisiana, then they said their good-byes.
At the Chancellor house, Jill was alone with Katherine. She swung back and forth between being furious at her and feeling sorry for her. She said that it had all started with Phillip, the man Katherine had killed to keep her from having. But beyond that, she couldn't think of a single happy memory between them. In fact, she remembered several of their more brutal fights. Later, Jill softened, remembering when she'd offered Katherine support during her breast cancer scare. There had always been some kind of bond between them that neither could break. When Mac arrived to tell her grandmother good-bye, Mac said she'd come back when Jill was gone. But Jill told her to sit down; they needed to talk. Was Mac now willing to admit that Jill had been right about her all along? Throughout all of this, Katherine's eyes showed that she was taking in all that was going on around her, but no one else seemed to notice her awareness.
Nick told Sharon that he'd decided to take his father up on his offer to mentor him. At first Sharon was happy, but the more she studied Nick, the more certain she was that something was wrong. She wasn't sure she could offer her support if Nick wasn't taking the job for the right reasons. When Nick said that he didn't want to discuss his father with her, Sharon demanded that he listen. His father was in no way to blame for the kiss Nick had seen. He'd been offering her the kind of fatherly support that he'd always offered, and which she'd so much appreciated as her own father had run out on her. And her feelings for Victor were like those of a daughter, but because she'd been so messed up at that time, she'd kissed him. She was no longer messed up, and there were no romantic feelings at all between her and Victor. She hated to see Nick continuing to let this poison him.
Nikki wasn't as happy as Victor had expected when he told her the news about Nick's decision. She felt that as long as Sharon was around, there would continue to be conflict between father and son. What would Victor do to Nick as a result? She was also worried about how Victoria was going to take the news. Victor might not think he was damaging Victoria, but Nikki wasn't so sure. She felt this decision was going to have a much greater impact on them all than Victor anticipated.
Dru and Jack were surprised to hear that Damon had run into Phyllis. Jack wanted the subject to die while Dru was there, but she kept harassing Damon with questions. Damon said that Phyllis had been forthright about working for Newman, and told him that she'd once worked for Jabot, so she was proof that there was life after Jabot if he ever wanted to change companies. Dru kept making snide remarks, so Jack finally had to admit to Damon that Phyllis was his wife. Damon was obviously amused, but not eager to get in the middle of their conflict. He just wanted to return to his lab and get to work. Dru, on the other hand, was all for Jack going after Phyllis for trying to steal their R&D guy from them.
Phyllis told Neil about her meeting with Damon and assured him that, even though Damon would honor his commitment to Jabot, she suspected that it wasn't a long-term commitment and they might be able to lure him over to Satine. When Phyllis and Neil started checking their sales numbers, they saw that the Satine products were performing so poorly that it was beyond any reasonable explanation. They then went to Fenmore's at the mall, posing as customers interested in buying Satine products. The sales associate discouraged them, urging them to wait for Jabot's new Tuvia line to be released. Jabot really knew the cosmetics business, whereas Newman had only had a little success with a teen line. Phyllis went ballistic, going behind the counter to try to find any Satine products. The sales associate got a manager, who threatened to call security if Phyllis didn't come out from behind the counter. When Phyllis insisted that she show them where the Satine products were, the manager finally unlocked a cabinet. Phyllis started pulling out Satine products and putting them on display. When the manager tried to stop her, Phyllis mocked her for dressing in a suit to work at a mere mall, and Neil had to drag her away. Phyllis was livid that their products were not selling because they weren't being made available.
Jack and Brad held a meeting of their best clients to talk about competition with Sateen cosmetics. Lauren was one of those invited. One gentleman flew in from New York to listen to what they had to say. Brad played "bad cop" and laid it on the line -- they expected full displays of Tuvia with no preferential treatment to Sateen. Jack played "good cop" and gently encouraged them to remember how important Jabot cosmetics were to their bottom lines. The visitors were quite closed-mouthed during the meeting. Jack bid them goodbye and, before she left, Lauren was sure to comment on how sexy Brad was when he was being forceful.
At Jabot, Dru paid Damon Porter a visit. He ended up trying out some of his new scents on Dru's ankles. She enjoyed it immensely and wished for more. Her time ran out and she hadn't asked him the questions that she had come to ask. She asked if they could meet for dinner and he agreed.
Phyllis and Neil told Victor their story about what they had found at Fenmore's. They were freaked out about it and wanted to know what Victor was going to do. He took their news in stride and sent them on their way. He had more important things to talk to Victoria about.
Victor let Victoria know about Nick's return to management at Newman. She had all kinds of questions, especially regarding how long this would take and what did it mean. She was boiling inside when she realized that her brother would someday be her boss and that her father was doing this only to bribe Nicholas into liking him again. She saw it as a complete betrayal and slammed her way out the door.
Mackenzie and Jill were together with Katherine at her home. Jill wanted to part on a positive note. She admitted that she had been hard on Mackenzie and had just wanted what was best for her boy. She acknowledged the kids' love for each other and told Mac how she did understand true love and the loss of it. She knew how bad it must hurt inside and wanted her to know that she regretted that it had happened at all. Soon, Billy arrived, asking for some privacy with Mackenzie.
After settling her grandmother in another room, Mac returned to talk to Billy alone. He told her how much he regretted the hurt she was feeling, and he worried about how his mother was treating her. Mac said that she and Jill finally understood each other, because Mac had left nothing unsaid. In fact, she felt sorry for Jill. They did, after all, have one thing in common. Jill loved Billy very much. Billy then told Mac that he'd decided to go away. He needed to get away from Genoa City and his family and start over. Mac tried to dissuade him, but once she saw that his mind was made up, she admitted that she, too, had reached the same decision. She was only there to say good-bye to her grandmother. The two hugged and shared one last painful kiss, then Billy left. Mac went back to Katherine and shared her plans to go away. She thanked her grandmother for all the beautiful memories, but she needed some time alone to heal. She just wished she knew that Katherine understood what she was saying. Katherine then squeezed her hand and managed to convince Mac not to run for Esther. She wished Mac "God speed." Mac then took off Gary Reynolds' diamond and returned it to her grandmother, promising that she would be back and she hoped one day, she could have her grandfather's ring again. After a last look around, she left the Chancellor house while Katherine wept.
Nikki scolded Jack for leaving Phyllis alone at his office, making it possible for her to meet with Damon and try to lure him over to Newman. She said that Jack had to be more careful. Jack said none of this would be happening if Phyllis wasn't working for Newman. He wondered how Nikki kept her business and personal lives separate, and Nikki said she just made it up as she went. She then swore that Victor was the most romantic man in the world, and furthermore, the very things that drove Jack crazy about Phyllis were why he married her. Jack admitted the truth of that.
At Newman, Nick answered his father's question about what he would do regarding Satine, since their sales were tanking. Nick said he'd never approved of the line anyway; he'd cut their losses and cancel the products. Unfortunately Victoria was returning for a file she'd left in her father's office and overheard him. The two began verbally sparring, with Victoria accusing him of letting his ego get so big that he wasn't looking at the facts. They hadn't even launched the new line yet; he had no way of knowing how successful it was going to be. Victor finally put a stop to their fighting. He insisted that they were going forward with the Satine line, and he expected a list of suggestions from Nick in the morning. After he left, Victoria scowled at Nick.
Victor went to see Michael Baldwin, who was drinking at ten in the morning. Victor said he'd heard about Isabella Williams; it must have been distressing for Michael to see what he had. Michael admitted that he was upset to suspect that someone he'd known for years might have been murdered. But he was ready to talk business, if that's what Victor was there for. The two of them danced around what they could do for each other, with Michael expressing his admiration for the way Victor did business and Victor expressing his belief that Michael probably had very few scruples when it came to business.
Dru had taken Lily to Crimson Lights, where the teen was talking to her IM buddy on the computer when Colleen walked in. They talked about how Dru was getting on Lily's nerves and Colleen was tired of staring at the four walls of her house. But when Colleen spied J.T., she tried to make a quick exit, especially when J.T. walked over to her and Lily. Lily was the one who made the quick exit, and J.T. persuaded Colleen to sit down and talk to him. She confessed that she'd overheard him talking to a girl at the boutique. Evidently it hadn't taken him long to get over her. J.T. denied it, saying Mattison had invited him and his girlfriend to a party after J.T. told her that Colleen was his girlfriend. Then he asked why Colleen was at the boutique, and she admitted she'd come to see him. Some of their friends were urging her to give him another chance. Although she wasn't ready to go that far, she agreed that they could try again to be friends. They made a date to get together later so he could start teaching her to drive, then she left a happier J.T. in the coffee house.
On the patio of Crimson Lights, Phyllis couldn't resist joining Dru to pick on her. But Dru turned the tables, talking about how angry Jack was when he'd found out she'd been trying to get information out of Damon and had even suggested that he come to work at Newman. Phyllis countered by wondering what Neil was going to think of Dru's interest in Damon. Dru denied any personal interest, and as she prepared to leave, she warned Phyllis that she was likely to get a very frosty reception from Jack at home later.