Valerie is surprised when Tom Miller, another old high school friend from Buffalo, comes for a visit and asks for a job at the After Dark club. Meanwhile, Brandon and Mark learn that they've applied for the same prestigious scholarship, which turns into a competition for both of them. On a job interview, Steve is hit on by the employer, Diane, and hesitates about what to do. Donna proves to be a lifesaver when she fills in as the receptionist at her father's office for the day. At the end, Mark shows off his true angry and arrogant colors to Kelly after losing the scholarship to Brandon, resulting in her breaking up with him.

Steve meets a mysterious prankster student, known as the "Phantom of C.U.", while working as a night watchman - his penance for cheating - and feels compassion for him when Steve learns that the student, Larry, is homeless and wants to graduate from college. Meanwhile, Clare, and later Donna, try to arrange a blind date for Kelly, which turns out less-than-satisfying when the guy, an Englishman named Neil Phillips, annoys her. Donna begins a new career for herself as the weather girl on CU TV, which unfortunately nets her an unwanted fan. Tracy helps Clare work on the new college yearbook, and David becomes suspicious of Tom's true motives while helping to get the singer Donna Lewis to perform at the After Dark.

Donna thinks that her stalker is Garrotte Slan, the man who tried to rape her two years ago. Kelly and Clare decide to cheer Donna up by taking her out on the town to a male strip club, where the unseen stalker turns up the heat by attempting to run over Donna with his car. Meanwhile, Tracy and Brandon's weekend alone at her parents' ranch is interrupted when Sam, Tracy's ex-boyfriend, shows up. Steve leads Dick Harrison and fellow frat brothers in a sewing circle to salvage an investment of a Super Bowl T-Shirt sellout. Also, David and Tom team up to produce a Super Bowl party at the After Dark, much to Valerie's annoyance.

Despite Valerie's warning to stay away from him, Kelly decides to pursue Tom, which adds an extra dimension when he and Brandon, who still holds feelings for Kelly, face off in a hockey game. Donna is denied a permanent restraining order against Slan, while David becomes overprotective of her. Meanwhile, Tracy lets slip the three words "I Love You" to Brandon. Also, Clare and Steve's weekend of house-sitting at a bungalow prompts talk of them living together.

Donna's stalker, who is finally revealed to be a disturbed TV station worker, named Evan, takes her, Brandon, Tracy and a group of other people hostage in the campus TV station, where Brandon tries to calm down everyone's heightened tensions as Donna sits in front of the running cameras with a gun to her head. Meanwhile, Steve and Clare travel with their parents to a getaway in San Diego where they try to cool down the burgeoning romance between them. Also, Tom and Kelly's attraction between each other increases and David finds himself drawn to Chloe Davis, a aspiring singer determined to make it big.

On Valentine's Day, Donna's former beau, Cliff Yeager, shows up and causes concern for her and David. Meanwhile, Valerie's mother, Abby, whom she can't stand, arrives in town from Buffalo for a visit and asks Val for financial support. Steve commits yet another error with Clare when he decides to take up smoking pot with Dick Harrison. Chloe makes her singing debut and David get to be the MC for Luther Vandross at the Peach Pit After Dark's Valentine's Day party. Kelly continues dating Tom, and an unhappy Valerie tries to halt the union. Also, Tracy gets a big surprise from Brandon when she mistakenly thinks he bought her an engagement ring.

Kelly learns that her old engagement ring that Brandon bought for her years ago is the cause of the continuing friction between him and Tracy. Meanwhile, Donna can't decide whether to be with Cliff or David, while Chloe makes a move on David after she tells him that Donna is not the woman for him. Clare tells Steve to give one of his step-brothers, Ryan, an advance talk about the birds and the bees. Valerie finally confronts her mother and tells her the true, long-kept facts behinds her father's suicide which are: her father killing himself on the day Valerie and Tom threatened to go to the police with the fact that he's been molesting her. Also, Abby then flies back to Buffalo and Tom soon follows suit.