Drucilla tells Malcolm that she wants him to leave town. She says that he's changed since he has come back and that worries her. Malcolm doesn't understand what she means but is willing to oblige to her wishes. When Lily, Devon and Neil return, Malcolm is gone.
Phyllis doesn't believe she will stay out of prison unless she does something radical. Damon tries to talk her out of it; but Phyllis is determined. She goes to a tattoo shop and has the artist at the shop turn her into a man.
Paul sees Nick at the coffeehouse and they talk about Nick's feelings concerning Sharon and him working for rival companies. Nick hopes that soon Sharon will come to work for Newman, but the way things went, Sharon took up working for Jabot before Victor had appointed him as CEO. Nick is proud of Sharon and says that she has been doing a good job. Paul is reminded of his relationship with Chris and wishes someday they had a relationship like that again.
Bobby talks to Victor and hopes that he is not intruding. Victor says that it will be okay for them to stay tonight since they have no place to go.
Malcolm goes to see Olivia and she pleads for him not to leave.
Ashley receives a phone call saying that Jabot's distribution center is on fire. She is stressed and asks Jack if he can help. He says he can't get involved because of Victor's rules. Besides, he has been offered a position at Chancellor Industries as CEO. Jack wonders why Ashley isn't happy for him. She says that she has enough to worry about.
Brad and Sharon go over a speech and Brad is impressed. He also has Abby at work since Francis has the day off. When Abby is bored and calls Ashley, Brad suggests they go see Ashley. Abby is thrilled.
Phyllis, newly disguised as a man, is driving down the highway. She pulls out a flask, takes a few swigs, obviously wanting her breath to smell like alcohol. She begins swerving the car and is promptly stopped by a policeman. She admits to him that she's been drinking, and after shining his flashlight in her eyes, he arrests her on a DUI and takes her to the station. We see a little smirk come across her face, as if all is going according to plan.
Back at the office of Baldwin, Blair & Williams, Chris is telling Paul of her total exasperation over Phyllis' actions and her refusal to follow Chris' advice. Paul jokingly says Phyllis needs a muzzle, and Chris agrees....either that or an elephant tranquilizer! Paul and Chris are actually a bit testy with one another, it being obvious they still have their issues together, but they continue discussing the upcoming case of Phyllis and Damon. Chris is finding it difficult to continue representing them because of Phyllis' antics, but Paul reminds Chris that he's always known her to stand by her clients and reiterates that she's too nice a person to desert Phyllis. Chris agrees that she won't abandon Damon and Phyllis and will continue to represent them. Chris gives Paul the highlights of the case, including the fact that there was no prison tape of Phyllis' visit with Dominic, and says that as of right now, she doesn't know how she's going to prove their innocence. Paul offers his investigative help in the case, and she accepts. Paul's sheepish grin proves he's happy to be working with Chris once again.
Neil finds Malcolm at Crimson Lights and promptly sits down at the table with him. He tells Malcolm that Dru said he was leaving town. Of course, Neil asks for a reason and wonders where he will go next. With the tension between the two brothers obvious, Malcolm says he doesn't know. Neil is confused, particularly because Malcolm had already gotten a job at Crimson Lights, especially so he could see more of Lily. Malcolm says he has seen the people he came back to see, but now it's time to leave. Neil suspects all is not right and demands to know what's really going on. He questions whether Dru had something to do with this decision. Neil stresses to Malcolm his wish for him to stay around so they can work on their relationship. Malcolm says it's best he not stay and is determined to leave. Neil becomes disgusted and walks out.....Malcolm is also visibly upset.
Damon and Daniel are sitting at another table, Daniel having recently picked up Damon after his discharge from the hospital. Damon has realized that Phyllis can be a real handful and asks Daniel what's with his mother. Daniel says he has no clue but sees that she doesn't think before she acts. Malcolm spots them and comes over to their table, inquires of Daniel how Phyllis is doing and is asking details about the case. Damon and Malcolm share a few ugly words back and forth. It's obvious the two have taken an instant dislike to each other. Damon and Daniel then leave, and Malcolm tells Daniel he wants to talk with Phyllis.
Back at Jabot, Sharon is rehearsing her speech for tomorrow, when Nicholas, Cassie and Noah arrive, wanting to take her home. Sharon tells them she would like to leave, but she has to work on her speech. Nick then tells Noah and Cassie to go down and look out the window at the Christmas lights. He informs Sharon she won't be working there much longer. Sharon looks confused as to why she won't be working at Jabot. Nick says since he is now the CEO of Newman Enterprises, he can hire her there, as they had once planned. She reminds Nick she already has a job and really likes working at Jabot. Nick says she can have the same thing at Newman. Sharon reluctantly says she'll think about it, but the look on her face is less than enthusiastic. Cassie and Noah return. They leave for home with their dad. All seem rather disappointed that Sharon isn't joining them.
After putting in some more time on her presentation, Sharon gives it to Brad for his approval. He compliments her profusely on her work and tells her she is a real asset to the company. With this much needed boost to her ego, Sharon then leaves the office for home.
Brad and Abby arrive at the Abbott household. Ashley and Abby are overjoyed to see one another. Ashley then gives Abby a gift.....pajamas to wear when she spends the night at the house with her mother. Abby asks her dad if she can stay over tonight, and Brad agrees. Abby goes upstairs to put on her new pajamas. Ashley and Brad look at each other pensively. Abby returns, and Brad leaves. Ashley and Abby happily decide they will make some popcorn.
Things are not so pleasant out at the Newman ranch. Nikki joins Victor and thanks him for letting Bobby and Brittany stay. Victor is seething and questions why she cares about the problems of Bobby and Brittany. Nikki told him she had no idea when he would return and thought they could be company for her. Nikki accuses him of not even knowing how she feels when he leaves, and this final quest was the last straw. Vic states he know it hurts her when he leaves so that's why he chose to return. He tries to make her understand the hurt he felt when Victoria left and when Nicholas got him convicted, stating those were among the worst moments of his life. On top of that, he explained to her, was him finding out that Ashley had given birth to his child, with that child now rejecting him because of the riding accident. He stresses to her that while gone he realized he could not find any answers as long as he was away from Nikki. Nikki reminds him that all those same things affected her as well. Again, Vic stresses he returned because he realized he couldn't be without his wife. Nikki, with sadness in her eyes, tells Victor she longs to feel that closeness they once had but can't take that risk again. Victor, seemingly in shock at hearing this, stares intently at her. Nikki tells him that she's now older and wiser, that her love for him is no longer all consuming. It doesn't define her, she states, and admits that maybe she's changed. Victor asks if she's saying she has no room for him in her life. Nikki quietly states she has no answer to that but is grieving for what might have been....that theirs WAS a great love story. Finally, Victor asks Nikki if she wants him to walk away. Nikki responds, "Do what you must; that's what I'll do." Victor sadly states that he has never thought of leaving her.
Following all of this, Noah walks in and gives his grandfather a big hug....a dejected Victor holds him close.
Back at the jail, Phyllis is led to a cell with some scruffy-looking punks, her eyes darting around looking for Dominic. She makes a couple of remarks to her cellmates. They realize she's drunk and want to roll her to see if she's got anything valuable. She pretends she's going to be sick so they back off. The guard shoves in another prisoner. Phyllis realizes it's Dominic! They stare at each other for a moment. Phyllis, with her "man voice" makes small talk with him and actually gets him talking about Georgia, about the two people who are going to pay, and that he has the cops eating out of his hand. A guard comes by and comments how drunk that guy (Phyllis) was when "he" came in but is now talking non-stop. Damon seems to take note of this.....he then begins to stare at Phyllis rather suspiciously.
At the jail, Dominic started asking the disguised Phyllis a lot of questions about her "criminal" background. When she suggested that he finish his story, Dominic started laughing and said he'd tell her the story in front of someone else. He then demanded that the guard get Det. Weber there. He told Phyllis that her disguise was even better than the one she'd used at the hospital, but it wasn't good enough. A scuffle broke out between the two of them, and Dominic removed her wig. When Weber came in, he frisked Phyllis and found her tape recorder, then told her that he was going to formally charge her with conspiring with Damon to kill Dominic.
Daniel was freaking out about his missing mother to Kevin at the coffee house. He was afraid she was getting herself in deeper. But he also wanted to know about Kevin's conversation with Mac. Kevin was coy with him, refusing to tell him what was on Mac's mind. J.T. came in and, calling them "Fish" and "Sea Bass," asked if they'd seen Mac. Neither would tell him anything about her whereabouts and he left. Daniel then told Kevin that he was going to help him get J.T. out of the picture so he'd have a clear shot at Mac, but Kevin wanted no part of any more of Daniel's schemes.
Mackenzie told Katherine she wanted to move back in with her, especially now that she knew Arthur was gone. Katherine assured her that she'd be fine, and Mackenzie explained that she had other reasons. When Katherine heard Mac's complaints about J.T., she told her that Brittany and Bobby had moved in with Nikki. Mac said that didn't remove the disrespect that J.T. had shown her. Katherine suggested that her granddaughter might still have feelings for him. Mackenzie denied it, but later, when she was alone and remembering a time that J.T. had cared about her, she admitted to herself that she did still care. It was just that J.T. no longer did. When J.T. arrived at the Chancellor house full of optimism that Mac would come home now that Brittany wasn't moving in, Mac turned him down. J.T. left looking a little confused about Mac's behavior.
Sharon got home late to find the kids in bed and Nick up doing some work. He began to pressure her again about coming to work for Newman, but Sharon said she wasn't ready to jump ship. Nick warned her that Jabot was going down in flames, but Sharon said she'd stick it out as long as she could. She liked her job and felt good that she was working for her paycheck. Besides, as the new CEO, perhaps Nick should avoid the appearance of favoritism by hiring her. Nick said that he'd thought they were a team. Hurt, Sharon said they were a team, no matter where she worked, and she went upstairs alone to go to bed.
Gloria went to Michael's office to scold him for coming to the Abbott house and making suggestions that John needed to watch his bank account. In spite of Michael's accusations, she said that she was really fond of John. In fact, Michael and Kevin might want to consider that she'd given them an "in" to the Abbott family. Michael said he couldn't see himself at any of the grotesque Abbott breakfasts. He was sure that sooner or later, this would blow up in all their faces. Gloria said if John found out the truth, he'd forgive her. And she'd love to see the look on Ashley's face if she ever saw Michael and Kevin at the table. Exasperated, Michael suggested that they could set up Kevin with John's granddaughter, Colleen--the one he'd tried to incinerate. Annoyed by his negative comments, Gloria left.
Ashley told her father about the latest Jabot catastrophe, and John said that he'd never hated Victor more than at that moment. At a time when they could really use Jack's expertise, Victor had made it impossible for Jack to help them. He hoped that his son would accept the offer from Katherine, however, because Jack was too talented to be idle. As Ashley blamed herself for what was going wrong, Abby came downstairs and asked her mother to read her a story.
Left alone, John brooded about how to save his company. When Gloria came in with her hands full of shopping bags, John told her that Jabot was teetering on bankruptcy. Once Gloria was reassured that the family finances were stable, she cheered up and gave John words of encouragement and support. John's mood improved and he vowed to save his company.
Ashley visits Nick in attempt to contact Victor. Victor shows up and Ashley asks that they talk alone. Victor wonders how Abby is doing and Ashley says she is fine considering that her parents are separated. She is not there to talk about Abby, it's about Jabot. Jabot is in trouble and Ashley wants permission from Victor to get Jack to help them.
Neil suspects that Drucilla might have had something to do with Malcolm deciding to leave town. He tells her that Nick has decided to cancel the beauty pageant.
Sharon says that her presentation went well considering not everyone showed up. Brad says that Sharon did a great job. Drucilla comes to Jabot to talk to Brad about her old position and finds out that Sharon is their new spokesperson. Drucilla tells Sharon that she won't last long considering she has no experience.
Neil can't work together with Nick's attitude and decides to quit working at Newman.
Michael visits Phyllis in jail and she begs him to be her attorney. He is furious with her but decides to take on her case because they are friends.
Daniel goes to see Chris and tells her that Phyllis got arrested. Chris makes a call and finds out that Phyllis dressed up like a man and got a DUI so she could try to get recorded information from Dominic but her plan failed.
Damon visits Chris and Weber tells them that Damon can come and turn himself in or they will come and arrest him. Chris decides to be Damon's attorney; and Michael and Chris discuss working together on the case.
Ashley begged Victor to reconsider his stipulation that Jack never work for Jabot again. The company needed him now more than ever, and they'd only made the agreement because Victor had them over a barrel after he nearly destroyed the company with his bribery and interference. Victor said that being without Jack was the best thing that could happen to Jabot. He adamantly refused to back down. When Ashley asked him businessperson to businessperson what his advice was, Victor said there was a way to save Jabot. All she had to do was give him custody of Abby. Horrified, Ashley told him that would never happen. She left looking completely disillusioned with him.
Damon and Phyllis got into an argument in the middle of the police station, with Christine and Michael trying to quiet their clients. After the two were separated, Chris and Michael commiserated over the increasing complexity of the case thanks to Phyllis's actions. Michael pointed out that Damon had been the one wielding a sword. Weber told Christine that he was going to ask that Damon not be given bail because he was an escape risk. Later, when Christine returned to her office and told Paul how badly things were going, he set up a call between her and the warden of Dominic's Georgia prison. Christine said that if he didn't send her a transcript of Phyllis's meeting with Dominic, she'd go to the press with the news that private family conversations were being secretly recorded. Later, when a fax started coming in from Georgia, Christine began reading it with a shocked reaction.
Daniel ran into Malcolm at Crimson Lights and told him that Phyllis had been arrested for her stunt. Malcolm couldn't help but laugh, saying it sounded just like Phyllis. Malcolm blamed Damon for getting Phyllis into this mess, but Daniel wasn't so sure. Later, when Phyllis arrived at the coffee house, he was furious with her. He pointed out that she was all he had, and when she did these crazy things, she never thought of the consequences. He was beginning to think that Christine was right; Phyllis was her own worst enemy. Phyllis said that if Christine was doing her job, she wouldn't have to try to get evidence herself. But she urged him not to worry about her, insisting that Michael Baldwin was the best attorney in the Midwest and would get her out of this. She then made him agree to go home with her so they could both get some rest.
Drucilla couldn't believe that Neil had quit his job and tried to talk him into talking again with Nick. Not only was he walking away from the second best position of a major corporation, but her own job would probably be in jeopardy without him there. Neil wouldn't back down. He said he couldn't work for Nick as long as Nick was making bad decisions and recanting on Victor's promise that Neil's projects wouldn't be dropped. He felt good about leaving. He not only wanted to spend more time with his family, but he hoped he could use this opportunity to rebuild his relationship with Malcolm. After he left, Drucilla went to the ranch to see Victor, who was startled to hear that Neil had quit his job.
Lily was crushed to hear the news that Malcolm was leaving. She thought they had something special, and she couldn't understand how he could just walk away from his family. Malcolm assured her that he loved her; thoughts of her and Nate had helped him survive his ordeal in Africa. Although he couldn't explain his reasons for leaving, he promised to stay in touch with her. They left the office at the coffee house to see Neil there. While Lily went to splash water on her face, Neil asked Malcolm if she was in some kind of trouble. Malcolm explained that she was just reacting to the news of his leaving. Neil told Malcolm how much he wanted to reconnect with him and take this second chance to make things right. He'd even followed Malcolm's advice and walked away from Newman Enterprises. Malcolm said that changed nothing. He had to go. When Neil reacted angrily, Malcolm told him that Neil had no idea how much he was giving up for him.