Emily goes into labour while in the cabin shortly after Matt finds her with Nancy. Colin gets ready to fight in the duel, writing a farewell letter to Emily.
The Morrell clan turn up to settle an old score with Matt. As luck would have it Matt has left town leaving either Rob or Colin to fight in the duel - if they don't, the Morrell's will burn the town down.
The stables are proving to be hard to financially manage as Rob and Colin get behind in the bank re-payments. Victoria turns down another proposal.
After a long absence, Victoria Blackwood returns to Patterson's Ridge, only to find that the land is gone and she has been left with nothing.
Dave Turner arrives at Emily and Colin's to claim Josh and take him back to his family. Emily is upset and Josh believes that now Emily is pregnant, she and Colin won't want him around.
Two teenagers go missing in the scrub so Matt and Colin set off to find them. In town, a man has arrived to see Jessie one last time before he dies.
Foundation Day has arrived and with it brings Henry Wagner to town. Henry is in Patterson Ridge to catch a rabid dog. Danni agrees to meet up with him to help him hunt the dog.
Duncan leaves town just before Rob returns. In town, the stables are going up for auction and Rob wants to buy them, but can't afford it on his own. He must try and convince Colin that they are a good buy.
Nell Frampton sells Matt a bull called 'The Grand Duke', but soon after the bull vanishes and another bull turns up dead. Meanwhile, Emily and Colin move into their home.
Spanish gypsies pass through Paterson's Ridge, and Danni falls in love with Carlos, while Hannah loves Carlos' older brother. Then the town turns against the gypsies after several robberies take place.
Jessie McClusky turns up in Paterson's Ridge to run the Railway Hotel. While much of the town doesn't like Jessie, it is Emily's reaction which has Colin worried. It takes a real heart-to-heart for Emily to reveal her secret.
Miss Hannah Kirov opens a Russian tea room at the back of the general store to generate more income. The hotel owner though isn't happy with the business he is losing, so he cuts his prices in half.
Duncan Jones, an old friend of Rob's turns up while Rob is away. Danni is suspicious of him though as he seems nervous. The Race is being re-run and none of the McGregor's are going to be competing.
