Kate returns to Pine Valley image

Julia and little Kate's lives become intertwined. (Soaps.com)

Head Writer Megan McTavish, AMC is keeping with the show's tradition of Christmas surprises. 2006 will be no exception, and she says the surprise "is a very good one. It's something the audience wants and that people have been rooting for."

The big news: viewers will find out this week that Dixie and Tad's daughter Kate is alive�and living in Pine Valley!

Reports say that Julia will be an integral part of this storyline, when she suddenly gets custody of a little girl known as Kathy. The parents are friends of Julia from her time in the witness protection program, and on their way to Pine Valley to spend Christmas with her. They are involved in a terrible car accident that kills the father and critically injures the mother. Before she is taken to the hospital, little Kathy's mother asks Julia to take care of her adopted daughter, so she and Jamie take the girl back to Wildwind.

How this story will play out, and how little Kathy will be reunited with her biological parents is yet to be determined, but word has it that it will include a significant amount of conflict between Julia, Jamie, Tad, and Dixie, since just prior to the accident, Julia expresses her desire for a child to love.