Anne has settled in at Redmond College and formed a close friendship with Philippa Gordon. Philippa reports about her admirers Alec and Alonzo, whose letters she accidentally swapped, and expresses futile interest in Gilbert Blythe. Meanwhile, Anne receives letters from Avonlea: Davy Keith amusingly recounts everyday incidents, while Ruby Gillis announces her engagement to the Spencervale teacher. During a joint walk with Gilbert, Charlie Sloane, Priscilla, and Philippa, they discover "Patty’s Place" – a historic house that immediately fascinates Anne.

With the start of the Christmas holidays, Anne returns to Avonlea. During her stay, Jane Andrews surprisingly relays a marriage proposal from her brother Billy to Anne, which she promptly declines. In her reflections, Anne notices the life changes of her friends. The episode ends with a chance encounter between Anne and Gilbert during a morning walk in the snow, where Gilbert ties a slipped shoelace for her and then invites her to Green Gables.