Simon is busy causing trouble where he can. Carly and Jack draw nearer to divorce. Paul has both Emily and Meg eating out of his hand. Gwen and Will just might make it after all.
Katie is at the Lakeview. She was supposed to meet Kim, but something came up and Kim couldn't show. Simon walks up and asks her to join him at a table. As soon as they sit down he calls Mike an old gossip, says that it must be tough for him, his wife's ex coming to town and all. Katie says she is much closer to Mike than she was to Simon, he says he doesn't think that's possible. He asks her what her dreams are these days. She tells him she and Mike are trying to have a baby. Simon asks Katie why she is trying so hard to make him jealous. She says she's not. He doesn't believe her; he says she still has feelings for him. She says she's sorry, but she doesn't. He reaches across the table, asks her if she weren't married…she interrupts him, says that Mike is the love of her life, she never had that comfort with Simon of being thrilled to see him walk in the door. He says he's happy for her; she finally got the life she wanted. He then hesitates before he says that he's changed, and seems about ready to propose that she might find him desirable again when Mike walks in. Simon abruptly leaves. Mike is upset when he sits down and Katie tells him she was telling Simon about them wanting to make a baby, why she confided in her ex-husband. Once again, Katie grills Mike about what happened between Carly and Simon when he walked in on them with Simon naked. Mike wants to know if she and Simon talked about sex. She says NO! Mike is more man than Simon could ever be. She explains to Mike that Simon has always teased her, they teased back and forth, but their relationship was nothing like his and hers. She doesn't care what he does with Carly, all she cares about is him and that's all she wants.
Carly goes to the police station looking for Jack. Dallas tells her about what's happened at Raven Lake, tells her the killer is Eve and that Jack made the arrest and it was rough on him. Meanwhile, Jack is drinking in a bar. Carly finds him. She orders them both a beer. She tells him she came looking for him because she knew he was sitting there beating himself up, thinking he should have seen some kind of sign that the killer was Eve. They discuss the case, the kids who were killed. Jack says he hopes no more bodies turn up. He just can't get over the fact that he got to know Eve and didn't have a clue. Carly tells him that's because he's single, he wasn't thinking about anything but attraction. Jack says they shouldn't be having this conversation, they laugh. Carly says they are going to have to deal with each other for a very long time because of the kids. They toast as Simon walks in, he says Carly's babysitter said she was there; he needs Carly for an emergency at work. Jack is clearly upset; he get up quickly, tells Carly that the lawyers will be contacting her about the divorce papers, then he leaves. Simon gets a beer, he tells Carly he can take her to Santa Domingo to get a quickie divorce in a day or two. She says she'd have to call Jack and tell him. Simon says she could call him from the hotel. She agrees to do it.
As Paul and Emily toast to him buying the newspaper, Meg, Holden and Emma walk in. It's very awkward. He asks what they are doing and they tell him they wanted to surprise him, celebrate his and Meg's engagement. He says that they certainly surprised him! Holden and Emma leave. Meg is totally embarrassed. Paul takes her out into the hall. As they talk, Emily walks up and asks Paul if he wants to reschedule their meeting, that she doesn't want to intrude on a family gathering, she asks what they are celebrating and just as Meg is about to show Emily her engagement ring, Paul grabs her hand to hide it.
After Emily walks off, Meg calls him on it, asks him why he's trying to hide the fact that they are engaged. He says he's doing it for the baby because Emily's blood pressure is so erratic. He tells Meg the last time he upset Emily she shot him and tried to kill herself. He needs her to understand why he wants to keep anything from upsetting Emily. Meg tells him she's a nurse; she can't do anything in good conscious to endanger a child. She takes her engagement ring off and puts it on her necklace, just until after the baby is born. They kiss passionately.
When Holden and Emma get home, Emma says Meg only sees what she wants to see, that Paul is going to hurt her, but she doesn't even have sense enough to come in out of the rain.
Holden goes over to Jack's. Jack shows him the divorce papers he got in the mail. He tells Holden about Carly showing up to check on him and that it was nice. Holden asks him if he's sure he wants this divorce. Jack says he's not sure of anything anymore.
Emily's mother joins her at her table and learns that Paul is buying the newspaper. Her mother throws a fit then leaves. Emily is sitting alone, talking to the baby, telling it that this is the first step to Paul realizing where he belongs.
As Gwen lies in the hospital bed, recuperating from the wounds she received at the hands of The Slasher and wondering where she'll go when she leaves there, Will tells her she could come home with him and holds her hand. Barbara comes in bearing a huge bouquet of flowers. She asks Gwen how many dragons this poor boy has to slay. She gets Will to leave the room and talks down to Gwen, saying "You listen to me little girl, it took me a long time to accept you," giving her a lecture. Gwen tells Barbara Jade was at the lake and that she wants Will. Gwen is not over what happened between the two of them. Barbara tells her that life is full of predatory females and unsuspecting men. Gwen calmly tells Barbara that she'd appreciate it if she'd give her some time. Barbara says she'll give her all the time in the world if she'll just let her son know that she still cares about him. She leaves.
Will comes back in the room with the doctor, who wants to give her a sedative, says she needs some sleep. She falls asleep and dreams that The Slasher comes into the room and stabs her. Will rushes in and comforts her. He sits down on the bed and asks her about starting all over. Gwen says that's a good idea.
Next on ATWT:
Carly tells Simon that if she didn't know better, she'd think he was trying to get her in the sack--he tells her is.