Joey and Eddie have awarm fuzzy time walking in Boston. She eventually invites him to Capeside for Christmas. He declines, saying that it's too soon. Later, she muscles Audrey into going with her when she misses her flight to California.
At the Leery's, Dawson has brought Natasha and Todd home for Christmas. Todd proceeds to hit on Gale to Dawson's guarded amusement. Natasha gives Dawson signs that she doesn't take their relationship all that seriously.
Pacey arrives home in his BMW and is met by Dougie. While helping his brother brings the gifts in, Doug expresses concern in what Pacey is doing with his life. Pacey assures him that it is legal.
We have a Christmas Eve montage of the Leerys and the Potters at home, as well as Jen and Grams in some Cathedral somewhere.
Christmas morning, and Joey's dad tells her that someone is waiting for her - Eddie is outside. He missed her. Mike asks Audrey about Eddie and she says that Joey sees him as the perfect combination of Dawson and Pacey: the T1000 of love interests. Later, Eddie is left alone with Mike, not impressing him with truthful, but easily misconstrued facts: he didn't go to college and he's unemployed. Mike clearly challenges him.
At the Leery's, Natasha comes into Dawson's room and tries to tackle him. Dawson has had enough and calls her on her thing with the actor. She tells him that their relationship (hers and Dawson's) was just for fun. Dawson is suddenly clear on the fact that he didn't really mean much to her and that she somehow "gets a thrill out of screwing the help."
Everyone arrives at the Leery's. Pacey and Doug talk about the discomfort of the family with his expensive gifts. Doug asks again if Pacey's job is on the up-and-up. Pacey accuses him of being jealous. Doug says he may be, or perhaps he's just worried about Pacey.
The Potters arrive and Eddie invites Joey to go to his parents with him later that day. She accepts.
Inside, Audrey is drunk and takes tranquilizers from Gale's medicine cabinet. She spars with Jen. Gale asks Grams to say a prayer, but she is headed off by a very drunk Todd who rambles about religion, sex, his insecurities and how much he loves Dawson. After Mike rudely suggests that Dawson find a job for Eddie, Audrey goes to town. She tells everyone that they are hypocrites. First she mocks Jen. She then turns on the others. Dawson & Pacey: she says they hate each other and they'll never really get over the hurt from the past. Dawson & Joey: they slept together and never dealt with it - and until they do, they'll never be able to have a real relationship with anyone. Pacey: she's sorry that Joey hurt him all those years ago, making it impossible for him to have a real relationship, but he needs to grow up.
She storms out, snaking Pacey's keys. She stumbles to the car and starts it -- proceeding to slam in to the Leery's house, effectively parking in their living room.
Pacey and Doug argue. Pacey wants Doug to make this all go away for Audrey. Doug says she should face it - it will be better for her. Pacey is adamant. Doug says that Pacey hasn't changed - he's still looking for the quick fix. He'll do it for Pacey. Pacey will take the blame. He turns and tells Pacey that if he never told him, he's sorry, but when Pacey was a cook - Doug was proud of him - admired him. It was honest and noble. He then says pointedly that those things apparently didn't suit Pacey.
Jen tries to talk to Audrey but to no avail.
Dawson sees Natasha sneaking out. She's going back to L.A. on the next flight. She admits to Dawson that she slept with the actor. She tells Dawson that she never loved him, but she didn't mean to play so carelessly with his feelings. He says that he doesn't love her either - to which she smiles and confirms that she knew that from the beginning. She tells him that he's going to make some girl very happy and she has to go before she breaks his heart and turn him all cynical. He responds jokingly: Don't flatter yourself. She leaves.
Joey and Eddie head out and he tells her that she should stay there. She has enough to deal with. He was right. It was too soon. He wasn't ready for fathers who hate him and ghosts of loves gone by - and it would be just the same at his parent's house. They would look at her suspiciously and wonder why a girl as beautiful as Joey would be with him. When she left they would swoop in and ask him what he thought he was doing - that girl will break his heart. Joey tells him that she has no intension of breaking his heart. He replies with no one ever does. He leaves.
Finally, Dawson and Joey meet on the dock. They talk about where they are. Joey says she spends a lot of time pretending that they never meant anything to one another. Dawson says he deserves that. She doesn't agree - and besides it never works. She says that it's easy to hate him because he's out there - and if she ever needed him he'd be there. He concurs. So why do they keep hurting each other? Dawson offers that they aren't hurting each other right now. Joey says that she just wants to stand there with the one person who may be able to help her figure out how everything got to where they are. They can go back to hating each other in the morning. Dawson puts his arm around her. He leans over and whispers: I don't really hate you, you know? Joey smiles at him and whispers back: I don't hate you either. They look out over the water as we fade to black.