Karen's old boyfriend, Teddy Becker, comes to visit. Teddy is convinced that Diana is his daughter, but Karen assures him that she is Sid's. After hearing Teddy tell Diana that his sons asked to be adopted by their stepfather, Karen decided to let him think that Diana could be his. However, Karen shows Diana a photo of Sid's grandmother, who looks exactly like Diana. Richard gives Laura a new car for her Christmas gift, but then Scooter comes by with a brand new Mercedes for her. Val is upset by past Christmas memories of her when her father died and Lilimae abandoned her. Gary reminds Val that Lilimae was only 14 when she got married, so Val should give her a break. Lilimae gives Val a quilt and they make up.
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