Phyllis returned home and found Diane sunning herself by the pool. Jack arrived in time to prevent a fight and, after sending Diane away, told Phyllis about Ashley's good news. Phyllis was happy until she realized that Diane had known about Ashley's troubles before Phyllis had. Phyllis served Jack a sandwich but left quickly when she spotted a nearly naked Diane flirting with Jack.
Finding Diego and Sharon holding hands at Sharon and Nick's place, Victoria confronted them. After Diego left, Victoria accused Sharon of trying to get close to Diego and warned her to stop spending so much time with "the help." Sharon walked out as Victoria warned that Diego could cause problems for Sharon's marriage.
Sharon explained to Diego that since Victoria sensed something was up with them, she was going to tell Nick the truth. Diego convinced Sharon again not to tell Nick about their lovemaking. Diego confided that he would like to consider what would have happened if she weren't married. Nick interrupted and sought Sharon's help in setting Victoria up on a date. Victoria worried to Olivia that Diego was going after her brother's wife.
Ralph showed Felix the fence a photo of Kay's necklace and asked how much he'd get for it. After Mac insisted to her mother that she wouldn't leave town, Larry stopped by the estate and learned Esther was at Yves, setting up for the after-prom party. Billy stopped Kay and Jill from arguing and then had a private moment with Mac, who admitted that her mother acted guilty sometimes.
Christine stopped at the ranch to see Sharon and tell her that Nick had enlisted her help in finding an eligible man for Victoria to date. When Christine admitted that she knew Nick felt his sister needed a distraction to divert her from her suspicions about Diego, Sharon confessed to Christine that she and Diego had had sex when she and Nick were separated. As the two talked, Sharon said she didn't blame Diego for what had happened, and he'd convinced her not to tell Nick in order to keep from damaging her marriage. Christine said she'd been in both Nick's and Sharon's positions, and Sharon would have to make her own decision about what to tell her husband. However, Christine cautioned Sharon that if that kind of bomb were going to be dropped on Nick, it would be better if it were from Sharon than anyone else.
Victoria began her campaign to lure Diego into trusting her and revealing his agenda to her. She was polite to him about going for a ride, and he offered to saddle her horse. When he was finished, they talked. Victoria told him she was beginning to second-guess herself because so many people had told her she was wrong about him. At first suspicious, Diego finally accepted her outstretched hand.
After Victoria left for her ride, he called Sharon and told her about Victoria's behavior. Sharon warned him not to let his guard down, and Diego promised he would not. Unbeknownst to him, Victoria was standing out of sight, listening, as he told Sharon they had "dodged a bullet."
As the teens prepared for their prom, Billy and Mac talked about the situation with Amanda and Jill. Mac admitted that her mother was acting so strangely that she was beginning to think her mother might be guilty. Billy told her that no one knew what had happened, and people were innocent until proven guilty. He was so supportive of Mac that she hugged him with gratitude, then they left to get ready for the prom.
Raul watched while J.T. and Brittany flirted with each other as the kids got everything ready for the prom. Later, J.T.'s friend assured him that he'd gotten the sleeping bag J.T. had wanted in order to follow through on his plans to have sex with Brittany at the lake.
Rianna was concerned that Raul was making himself sick after he vowed not to go to the prom and endure watching Brittany and J.T. together. She finally confronted Brittany and told her that she and Raul were playing a game, pretending to be involved with each other, just like the game Brittany and J.T. were playing. When Brittany doubted her, convinced that Rianna was setting her up to be humiliated, Rianna told Brittany that the entire situation was making Raul sick, and there wasn't enough insulin in the world to counteract how bad Brittany was making him feel. Brittany was distressed to hear that Raul might be that upset.
After hearing from his fence that Mrs. Chancellor's necklace might net him a lot of money, Ralph was determined to go through with the theft. He fantasized about Mac and how she had grown up, saying that there was someone he could have only if he took her, because she wouldn't be impressed with the money or car that selling the necklace might give him.
Amanda tried to convince Katherine that as Mac's mother, she shouldn't chaperone at the prom and cramp Mac's style. Katherine dismissed her concerns and left the room. Amanda was startled to see Ralph looking at her through the window. She hurried outside and told him that she hadn't been able to persuade Katherine not to make her chaperone the prom. As they bickered, Larry drove up, and they hid from him. Larry rushed inside and told Katherine they needed to talk.
Katherine was delighted to hear that Larry might have proof of Amanda's innocence. Based on the information he'd gotten from Esther, Larry had followed up with the phone company and found out that not only had they not sent anyone to service the Chancellor phones, but they had no employee by the name of Jay Taylor. When Billy, Mac, and Amanda entered, Larry shared his good news. Amanda pretended to be relieved that there might be another suspect in the theft of Jill's bracelet.
After the others left, Larry questioned Amanda about why she was still acting strangely and hadn't thanked him. Amanda told him she had to get ready to leave for the prom. Outside the house, Larry voiced his confusion about Amanda's reactions to Billy. Billy told him that Mac had actually worried her mother might have been involved in the theft. Since Larry had found the new information, he was sure everything would work out. However, Larry continued to ponder the entire situation.
Isabella stopped by the Abbott house to see Diane. Diane congratulated her on her marriage to Paul and told of her plan to move from the pool house to the guest suite in the main house. She said that dealing with Phyllis was like battling the "forces of darkness" just to enable Jack to have a relationship with Kyle. She was annoyed when Isabella cackled over her tales of woe, especially the incident when Phyllis had flushed the toilet so that Diane had been scalded in the shower. Isabella assured Diane that since all was fair in love and war, Diane would prevail over Phyllis. Diane agreed and recited another saying: slow and steady wins the race.
Jack and Phyllis awoke after a night of skinny-dipping and making love. When Jack assured Phyllis that he'd shot down Diane's attempt to move into the guest suite, Phyllis warned him that she believed that was only Diane's opening salvo. Later, they went downstairs, where Colleen was happily discussing with her grandfather his idea to let Colleen go to the prom to help Sean with the webcast. John was concerned to hear that Sean had resigned, and Phyllis promised she'd help them find another web master.
When Phyllis excused herself to make a phone call, Jack and John talked about how much Jack liked having Kyle nearby. Phyllis could be seen sneaking in and out of the house with a book on plumbing and an acetylene torch. Later, when everyone gathered downstairs, Diane entered and suggested that she take Kyle over, since they were all at home.
As Diane started to leave, she felt a drop of water from the ceiling. They all looked up, with John wondering if there was a problem in the guest bathroom, when they heard a loud noise. As the others ran for the stairs, Diane saw Phyllis remain behind with a gleeful grin on her face.
Serena paid Neil a visit to do some drinking with him, but found him almost out of it by the time she got there. Soon there was a knock at the door -- Nate wanted to ask his uncle about sailing and wondered where he was. Serena had taken Neil into another room so that Nate wouldn't see him in the state that he was in. Serena took Nate home to his own apartment, surprising Olivia.
Diane tried to prove to John that Phyllis was behind the plumbing disaster that had damaged the guest suite. She kept telling him that he was blind, which didn't help her case -- but she convinced him to let her try to prove it to him. She confronted Phyllis when Phyllis entered the house from swimming, asking Phyllis to brag about her accomplishment and wondering if Phyllis had known that Diane had suggested that she and Kyle move into the guest suite.
Phyllis stood her ground, denying everything. She did, however, make it clear to Diane that her days were numbered and that she had better not mess with Phyllis. John had been listening and didn't buy Diane's logic. He agreed to remember Phyllis' words in the future.
It was time for the prom, and everyone left the Chancellor estate except Katherine. She stayed behind to make a few phone calls and finish getting ready. Ralph was waiting outside and wondered why Amanda was going with everyone else -- he waited for her to return, thinking that the door was locked and no one was home.
At the prom, things were starting to sizzle. The Glo by Jabot kids were on-camera, Colleen was helping Sean with technical work, Mac and Billy were thinking back to the previous year's prom, Raul was unhappy because he had no choice but to be there according to his contract with Jabot, and Brittany couldn't quit looking at him with Rianna. Jill was hassling Sean about leaving town and not staying to work out their problems. The band, A-1, arrived from England, and Sean introduced the kids to them. Colleen especially was overjoyed.
While Amanda tried to sneak away, Larry continued to wonder what was going on with her. The band played their hit - "Caught in the Middle" -- a love song that meant a lot to Brittany as she wondered whether or not she should apologize to Raul. Rianna had an idea that she wanted some help with, something that would hopefully get Raul back on track.
Just when Amanda thought that she could slip away to help Ralph, Larry appeared from nowhere, wondering where she was going. Back at the mansion, Ralph was getting impatient waiting for her return. Just then, he looked in the window and saw Katherine. He ducked away and watched her walk outside and lock the door. The shadow of his pipe loomed above her head.
Leanna Love griped to Lou about how she couldn't reach Max Hollister, and without him, her exposť on Victor was ruined. The pictures of Victor with Ramona weren't enough unless she could prove a pattern with Victor and his visits to his ex-wives and lovers.
Meanwhile, Victor walked into a diner in Kansas. He called Nikki to tell her he'd be back in Genoa City the following day, but Nikki, still annoyed by the news about his visit to Ramona, was terse and hung up on him. Before Victor could react, Hope walked into the diner. She told Victor how well Victor, Jr., was doing and what a healthy, happy boy he was. After telling him that it was her choice not to be involved in a romance, she questioned why Victor was there. He admitted that he was on a quest and felt he might find the answers he needed in Kansas. Unbeknownst to the two of them, a stranger across the diner was videotaping them with a hidden camera as they talked and held hands.
Nikki was less than pleased when Max Hollister showed up in her office with flowers and an apology. Though she pretended none of the news she'd received from him and Leanna had disturbed her, Max wasn't buying it. He told her that he'd broken off all contact with Leanna, and he wanted to explain why he'd been so angry with Victor. It hadn't simply been that Victor had gotten the best of him in a business deal, but Victor's timing. At the time Max was trying to acquire Julia's company, he'd just found out his wife was cheating on him and he'd ended up divorced. So his business success had been everything to him at that time, whereas to Victor, it was just a chance to "play the hero" by helping Julia. Max said he understood how Nikki was feeling and suggested she strike out at Victor by having dinner with him.
Olivia was shocked when Serena showed up at her door with Nate. After finding out that Nate had tried to see Neil, she ordered him to go to bed. Brad went with him to hear about Nate's plans to learn to sail, while Ashley listened as Olivia demanded answers from Serena. When Serena told her that she'd kept Nate from seeing his uncle passed out on the couch, Olivia wondered why she'd even answered the door.
Serena disgustedly said that she knew Olivia would find a way to blame her. Serena said perhaps instead Olivia should keep a closer eye on her son. After Serena left, Ashley, Brad, and Olivia talked. Olivia wondered if she should move out of the apartment so Neil wouldn't be that accessible to Nate. Ashley reminded her that Nate had already had too many upheavals in his life. Brad suggested that they get Neil into detox that same night.
Neil was awake when Serena returned to his apartment. After he poured them both a drink, he spied Nate's backpack in the room. Serena admitted that Nate had been by to see his uncle and talk to him about his summer plans, and she had walked him to Olivia's apartment. Neil decided to go to Olivia's to see Nate.
Just as Ralph was about to attack Katherine from behind, Esther spoke from inside the house. Ralph retreated to the bushes while Katherine left for the prom, and Esther left to get things ready for the after-prom party at Crimson Lights. At the Colonnade Room, Larry kept a watchful eye on Amanda, sensing that she was up to something. She was finally able to use Katherine's arrival at the prom to make her getaway, saying she needed to lie down in the ladies' room for a few minutes after dancing so much. Instead, she rushed to the Chancellor house and let Ralph in. When she tried to leave to get back to the prom before she was missed, Ralph grabbed her and told her she wasn't going anywhere until she helped him get what he was there for.
Jill was not having a good night at the prom. First, when she tried to talk to Sean, he was all business, telling her that he had to stay focused on his web site work. She was amazed that he could say he loved her so much then treat her as coldly as he did. She pointed out that he was the one who was throwing everything away. Later, she happened upon Billy and Mac as they reminisced about their other prom and talked about the Glo by Jabot summer campaign. Jill correctly guessed that Mac had decided to join the other teens for the summer after all.
When Jill implied that Billy didn't have the authority to tell Mac she could, Billy agreed and said he'd talk to his father, brother, and sister the next day. Jill knew she was defeated. Then Billy made it worse by telling her the information Larry had gotten about the phony telephone repairman, pointing out that soon Amanda would be cleared of any wrongdoing. Jill stepped onto the balcony, obviously miserable about her life. At that point Katherine joined her. She repeated the news about the repairman and Amanda's innocence, then suggested that Jill leave so the teens could have a good time without having to endure the "bad smell" of Jill's presence. At that point, Jill furiously turned around and threw the contents of her glass at Katherine's face.
Rianna enlisted Mac and Billy's help in carrying out a plan to help Raul and Brittany make up. When Colleen decided that J.T. was entitled to know what was going on, he confronted Rianna. She told him that she and Raul had been playing a game to make Brittany jealous, and the game was over. J.T. threatened to tell Brittany what was going on, and Rianna warned him that she would never forgive him if he did. Finally J.T. agreed to let Rianna proceed, sure that when the prom ended, Brittany would be leaving with him.
Brittany confronted Raul and told him she knew that he and Rianna had been playing a game. She said they weren't very good at it, and Raul agreed, saying Brittany was much better at playing games than he was. She accused him of trying to deceive her with all his talk about the "moon and the stars" at the lake after the play. He countered that she had merely been messing with his head with all her talk about how "just holding hands" with him had been so wonderful.
As their argument escalated, they failed to hear the announcement that showed Rianna's campaign had worked: Raul and Brittany were voted king and queen of the prom. As they were pushed on stage to be crowned, still glowering at each other, Raul tried to get them out of it. Brittany finally said it was just one dance, so they could play along. As they slow danced together, they finally looked into each other's eyes, apparently getting caught up in the romance of their moment in the spotlight. While Billy and Mac danced next to them, J.T. walked away in a huff, and Rianna looked on with a bittersweet expression, knowing she'd done her best to make Raul have a good prom after all.