Joss and Maguire have a deal that they sleep together when they want, but with no pressure, just sex. Later, he tells her that he is interested in someone else. Maguire and Sarah kiss outside the bar, but then she apologizes and tells him that she has a boyfriend in San Francisco. Maguire gets disappointed. Romy and J.B. try dating, realize they have little in common, but when they find out they're both lactose intolerant, they get together. Sarah gets a job as a decorator for one of Archer's rich friend, Mrs. Halloway, and is offered to live in their house. But she turns the job down, because she doesn't want anything handed to her as she had back in San Francisco. Sarah tells Bailey that she's decided to stay in New York.
When Sarah is kicked out of her apartment by Romy, Archer offers her his place for the New Year's Eve. and Sarah finds out about Joss and Maguire's ""arrangement"". Maguire get robbed and Joss gets fired. J.B. backs out of his millennium dream date. Romy and Joss sit around eating candy and watching TV. Sarah almost ends up as a third wheel on Archer's millennium date, but instead gathers all of her new friends together to ring in the millennium with her on the street.
Sarah, Romy and Joss go on a quest to meet men in New York, and have a contest to see who can have the first meaningful dating experience. Romy meets a theater critic who turns out to be married. Joss dates a single father. Sarah goes out with a string of obsessive guys. Romy lands a national television commercial. Sarah takes a job as an au pair for Spencer's stepmother.
Romy's friend, Molly, ingratiates herself more and more into Romy's life, seemingly stealing her friends and honing in on her acting class. Romy has had just about enough, but Sarah and Maguire find themselves becoming better and better friends with her. Then, the unimaginable happens - Molly is murdered during a mugging and Sarah, Romy and Maguire are overwhelmed with grief and guilt. Maguire feels that the hospital was negligent; Sarah is panicked about her own safety in the city; and, Romy is so emotionally shattered that she packs up her belongings and moves back home.
Spencer asks Sarah for all his money back. Sarah is being sued by a client, and all this situation lets her in deep debts. JB finds a last client for his business, but turns out he's a cop and arrests JB. The officer tells JB he had lived in Sarah's apartment 20 years ago. The officer starts asking questions about Sarah to her friends until he finds out her last name is indeed Merrin - like him. He interrogates Sarah and confesses knowing her mom. He tells her he's her father.