All of Harmony head out to the park for the town's annual Christmas tree lighting ceremony and celebration. The event takes place at the ice rink there, but not everyone is happy to be there. Charity is forced to watch when Kay snuggles up to Miguel and Maria as this new family unit enjoys its first Christmas together.

Sam and Ivy realize that Ethan and Gwen are still heartbroken over the loss of their baby and not in the holiday spirit. They reach out to comfort them. Beth is concerned when Sheridan once again calms baby Martin just by holding him -- just the way a mother would. Rebecca plots to get even with an oblivious Theresa by going after Theresa's child. A chill runs down Theresa's spine when she realizes something is terribly, terribly wrong.

Grace tries to get into the Christmas spirit by creating new holiday memories with David and John, but she is haunted by memories of the good old days with Sam and her daughters. Tabitha and Julian share memories of Christmas Past with Timmy. Precious fantasizes about Luis... as a Sexy Santa!

Fox is shaving in his bathroom and he imagines Whitney is in the shower, telling him to join her. Fox gets in the shower and they begin to kiss. Fox then snaps out of his dream, realizing he has to get ready for Sarah's funeral.

It is the day of Sarah's funeral and Ethan and Gwen plus Rebecca and Julian are in the Crane family room. Gwen is beside herself and begins to look at the paper. She starts saying "Oh my god" when she sees an ad for baby things in the paper. She is visibly distraught while Ethan tries to comfort her. Rebecca tells Julian she spoke to the social worker Clarice and they are going ahead with their plan today against Theresa. Julian begs her to change her mind but she is adamant about destroying Theresa, unless Julian wants TC to know about his sordid past with Eve. Rebecca tries to comfort Gwen and remarks how happy she is that Ethan and Gwen have reconciled, but notices Gwen is not wearing her wedding ring. Gwen explains that in Los Angeles she threw her ring at Theresa and Theresa kept it. Rebecca insists that Ethan go tell Theresa to give him back the ring and to warn her not to come to the funeral. Gwen wants Ethan to stay with her but Rebecca remarks that she, Julian, and Fox will be there to comfort her. Ethan leaves to go confront Theresa. Julian takes Fox aside once again telling him to stay away from Whitney Russell. Fox blows off his father's request stating wouldn't it be wonderful if Julian could be with Eve and he with Whitney, if only Rebecca wasn't leeching on Julian. Rebecca and Gwen are talking about Theresa and Rebecca lets it slip about her plan for Theresa. She thinks Gwen will be angry with her but Gwen wants Theresa to go through the same pain that she is going through. The only thing is that at least Theresa will know her son is alive while Gwen will have to live every day knowing her daughter is dead.

At the Lopez-Fitzgerald house, Whitney and Theresa are feeding Little Ethan a bagel. Theresa talks about how shaken up she is by Rebecca's remark at the tree lighting and is afraid Little Ethan is going to be taken from her. She wants to go to the funeral to ask Ethan, as her lawyer, to help her with Little Ethan but Whitney stops her. Pilar enters and tells Theresa not to go to the funeral because Ethan has his own problems and has no time for hers. Theresa wants to go to support him but both Whitney and Pilar refuse to let her go. Pilar tells Theresa that Rebecca is just a bully and they will do something about her feeling in a few days. While they are talking about Ethan, there is a knock on the door and it is Ethan. He tells Theresa not to go to the funeral because he doesn't want her there. He tells her that he and Gwen have reconciled and that he loves Gwen and will always be with her. Theresa tries to say that she and Ethan will be together but Ethan stops her and asks her for once to listen to him. He reiterates the fact that he loves Gwen and that she is his wife, therefore they will be together forever. Theresa tells him about what Rebecca said, but he blows it off saying Rebecca is all talk. He asks for Gwen's wedding ring back and through tears, Theresa reluctantly gives it to him. Ethan finally says that they are to have no contact ever, not on the phone or anything. Theresa is heartbroken and tries to convince him otherwise but he is insistent that they should be out of each other's lives. Ethan leaves and Theresa is sobbing. She is sitting in the rocking chair when Pilar and Whitney come in and ask what happened. Theresa tells them what Ethan said but then Little Ethan comes over with a picture for Theresa. She is happy because she knows that she still has her son. Theresa talks about how much she loves Little Ethan and Pilar says that Theresa and her siblings are what kept her sane after Martin disappeared. Whitney and Pilar leave for the funeral and Theresa begins to read Little Ethan a story about a lost boy looking for him mother but has to stop when she gets too emotional. The doorbell rings and it is the social worker handing Theresa papers stating that she is an unfit parent. Theresa doesn't understand but the social worker comes in the house, accompanied by an officer and takes Little Ethan. The officer is trying to restrain Theresa who is going crazy because they are taking her son.

Hank and Luis meet on the pier and Luis is telling Hank about Sheridan's condition. Luis tells Hank about how Sheridan thought Beth's baby was hers and says today is going to be especially hard for her due to the funeral. He says he is going to take Sheridan breakfast so he and Hank leave for Sheridan's cottage.

At the Wallace house, Beth comes in frustrated because baby Martin won't stop crying nor will he sleep. Mrs. Wallace says that is because he is away from his mother and begins praying to the angels. Then the Little Angel girl is talking to God pleading with him to stop Beth from harming Sheridan. God says that they can't interfere and the Little Angel Girl is very upset. Beth wants to leave for the funeral and she, the baby and Mrs. Wallace leave for a walk.

The Little Angel girl then sees Sheridan restlessly sleeping and urges Sheridan's subconscious to find her baby. Sheridan begins to sleepwalk, walking right past a sleeping Antonio and out of the cottage. She is dressed in only a negligee and is calling out for her baby. Luis comes to the cottage and notices the door is open and is angry to find Antonio asleep on the couch. The two brothers bicker once again over Sheridan until Luis checks the bedroom and realizes Sheridan is gone. They all go outside and conclude from the footprints that Sheridan is sleepwalking again. Luis, Hank and Antonio go searching for Sheridan.

Beth and company are walking the baby, who want stop crying. They then see Sheridan walking towards the cliff, and Beth is hoping that she will fall to her death. Beth figures this way Sheridan will be out of her life for good, and nothing traces back to Beth. Sheridan keeps calling for her baby. The guys come to the cliff and see Sheridan about to fall right over it. Luis saves Sheridan just in time, waking her up. Sheridan is puzzled at why she is by the cliff but then remembers that she heard her baby crying. Right then Martin starts crying, to Beth's dismay. Sheridan is convinced that she hears her baby. However, the baby stops crying and Hank remarks that Sheridan must have heard the ocean. Luis tells Sheridan they have to go get ready for Sarah's funeral because they don't want to be late. Luis, Sheridan, Antonio, and Hank leave to get ready for the funeral. Beth is relieved that no one saw her and comes up with the perfect plan to rid herself of Sheridan forever.

Gwen and everyone arrive at the cemetery to see Sarah's tiny coffin. Gwen breaks down while Rebecca is cursing Theresa for putting Gwen through all this heartache. She vows to make Theresa as miserable as Gwen is now. Ethan arrives and he and Gwen silently grieve together.

Eve takes Luis and Antonio aside and chastises them for upsetting Sheridan with their bickering. She says it is not healthy for Sheridan's already-fragile state of mind to listen to this. Instead of calling a ceasefire, Luis lashes out at Antonio for not being more attentive to the emotionally fragile Sheridan.

It's the day for baby Sarah's funeral and family and friends gather at the gravesite to offer Gwen and Ethan emotional support. Rebecca bides her time, knowing that Theresa is about to have her baby taken away from her. A desperate Theresa is devastated when it appears that custody of her baby is being challenged.

Julian tries to make peace with Ethan and Sam, and let bygones be bygones. Whitney talks to Fox about the problems brokenhearted Theresa is having and Fox uses this opportunity to get closer to Whitney so he can win over her heart. Meanwhile, Beth plots to find a way to gaslight Sheridan to drive her to suicide. She shares her plan with Mrs. Wallace and Precious.

Kay is stepping her plan to win over Miguel by having him bond with baby Maria. However, Kay's plan hits a snag when Charity offers to come along with Miguel to babysit little Maria. Kay lashes back by invoking Endora's powers to get rid of Charity once and for all!

Antonio and Luis urge Sheridan to skip Sarah's funeral rather than upset herself. Sheridan goes anyway so that she can be there to support her friend, Gwen. Beth begins to try to get into Sheridan's head to make her lose her mind. Once that happens, Beth is sure she can push Sheridan doing something that will appear as if she committed suicide.

Theresa is so upset about the upcoming custody battle, she crashes Sarah's funeral as Gwen breaks down in Ethan's arms. As Rebecca waits for word that Theresa has been served with legal papers, Julian begins to feel guilty over being pressured by Rebecca to destroy Theresa's happiness.

Kay is furious that Charity is constantly around and Kay can't get Miguel alone for some quality family time with their daughter. Tabitha steps in and uses Simone to separate Charity and Miguel. Precious has a "Perils of Pauline" fantasy with Luis rescuing her.

Beth makes a recording of Martin's cries and plays them to lure Sheridan to search for the baby. Sheridan is so desperate to find the baby that she is precariously close to the edge of a cliff. Sheridan loses ground and falls over the cliff.

Theresa's family and friends come together to help her when she explains she may lose her child. Gwen stops Ethan from acting on his impulse to go to Theresa, who tearfully begs for his help. Rebecca is delighted by this turn of events, but Julian feels terrible for this. Theresa lunges at Julian and pummels him in the cemetery. Gwen reminds Ethan that she expects him to keep his promise to her regarding Theresa.