Dawson finds Pacey outside his house and brings him in to show him his newly transformed room. It's exactly as it was in season one. Pacey works up to telling Dawson about his stock losses, but as Dawson tells him how he has maxed out three credit cards to pay for the film, thanks him and offers him an associate production credit, Pacey chickens out.
Back in Boston, Joey and Audrey share a heartfelt goodbye. Joey heads to Capeside, where she finds Dawson's latest script waiting for her on her front steps.
At Grams', Jen's mother Helen arrives at the invitation of Jen. Grams is angry until Jen tells her she didn't tell Helen about the cancer. After convincing Jack to come to dinner, he and C.J. chat awkwardly with Helen - who is not clear on which guy is which. Before Grams can make any announcements, C.J.'s uncle storms in and in an attempt to show Grams how much he cares about her, spills the beans. Before anyone can freak, Jen takes charge. She tells everyone that she cannot help Grams on her own, that is why they are moving in with Helen in New York. They sputter, but acquiesce when Jen makes it clear that it is going to happen. Later, she and Jack talk; and Grams comes in and tells him, much to his surprise, that he is part of the plan. She wants him - as a part of her family - to go with them to New York. He agrees.
Audrey runs into Pacey in a bar. She is friendly and blatantly honest, asking him why he's not at work. He tells her he is reevaluating and they put to rest much of the animosity between them. After Pacey leaves, once-rocker Audrey goes acoustic and plays guitar and sings a nice ballad in the bar.
Joey goes to Dawson's and finds her ladder back in its place. Dawson comes up behind her and tells her to go for it. They climb up and both climb into Dawson's transformed room. Joey is in awe. Dawson tells her that he gave her the script because he needs to know it he got it right this time. She tells him he's grown up. She admits that she always wanted to believe that she was the grown-up, that she'd escaped, and that he was the dreamer. Dawson points out that she did escape Capeside. But Joey says that she could never escape herself. She tells him that for so long, he was all she wanted and seeing him and knowing that he was the one growing up was what made her push him out of her life so she didn't have to face it. They decide they need each other.
Later, as they are leaving, they run into Pacey who finally tells Dawson the truth. His money is gone. Dawson freaks and Pacey takes the offensive to defend himself. They lash out at each other; Dawson challenges Pacey on his disregard for Dawson's instincts when he wanted to get out. He says that Pacey is always so busy trying to be the big hero that he doesn't see the big picture. Pacey in turn lashes out about Dawson needing to be on top, needing Pacey to fail to make himself feel better.
Joey tries to interrupt, but it's no use. Dawson says that it was never about Joey. It was about a day when Pacey decided to trade their friendship in for a competition. Pacey comes back with the accusation that Dawson's real connection to Pacey was based on his need to be better than someone else.
Later, after they have broken it up, Joey finds Pacey on the dock drowning in self-pity. He tells her to go to Dawson, as that's where she wants to be. She makes that realization that no matter how much she may love him, Pacey will always live in the moments where she lets him down. He counters that there have been a lot of those and she tells him that he asks for them: he spends so much time expecting the worst that he brings it to himself.
She realizes that she will have to fight to be in Pacey's life anywhere but the little box that Pacey has marked for her.
Finally, the three friends, in three different places, looking for answers all alone, wondering where to go next as we fade to black.