C.J. tells Jen that Grams broke up with his uncle. She jokingly confronts her, but Grams is standoffish. Later, when Jen corners her, Grams tells her that she has breast cancer, much to Jen's horror. Jen asks what she can do to help and Grams, always the strong one, tells her that it is her own battle to face, but when she sees how upset Jen is, she hugs her and says: I am not ready to die yet. They cry together.
After convincing Pacey to invest the money he made working with Todd to build a budget for his own film, Dawson moves home to work on his film. Gale, however, challenges him with: what are you going to do for a back-up plan? This cuts the flow Dawson had going on his script as he things about what he wants out of life, and he seems to hit a wall.
Later, he tells Gale that he doesn't have a back-up plan, because there's nothing else he wants to do. He asks her to have faith in him. She tells him about Mitch's scheme to make chewing gum on their stove and explains that Mitch's ability to believe that the world could be as good as you thought it would be when you were a child used to drive her craze but it was also what made her fall in love with him. It is clear from this that Gale is behind Dawson 100%.
Eddie explains to Joey that school doesn't start for him until fall and that he came back for her: he wants to thank her, and he needs her. She says no (she has moved on) and Eddie leaves.
The next day Harley comes help Joey pick out a dress for the high school dance that Joey is chaperoning as a favor to Harley. They banter. Later Pacey calls and asks why she stood him up going home instead of his apartment the night before. She makes excuses and Pacey asks her out again and Joey tells him about the school dance and Pacey invites himself.
Before Pacey arrives, Joey looks at her picture board seeing pictures of her with Dawson, Pacey and Eddie, touching the Eddie picture. Pacey arrives and gives her a corsage made out of veggies. They leave, Joey looking obviously uncomfortable, and the camera falls on the picture of Joey and Eddie.
At the dance, Joey and Pacey spend most of their time refereeing between Harley and Patrick, who is still intent on romancing Joey. When they have moments alone, Joey looks distracted and uncomfortable. Finally, at the end of the evening Joey tells him that she can't be with him; it doesn't feel right. Blindsided, Pacey tries to reassure her that they could work because he could love her again. She stops him and tells him that Eddie's back. He walks away, but returns later to offer her the dance that he owed her from their prom, though it ends awkwardly and sadly.
Finally, Joey takes a cab to Eddie's. He is hesitant when he opens the door, but in the end they are left kissing on the front steps.