
Paul Dooley is released from prison, having spent six months inside for tax fraud. Now bankrupt he does not know that his wife, Oonagh, has arranged a new life for him and their two children, Dermott and Grainne, in Ballykissangel. Paul is furious. As the Dooleys move in, Niamh moves out, planning to leave the village and move to the outskirts of Dublin. As she waits for the key to arrive at the Estate Agent's, she goes to a pub where she and Sean have spent some time in the past. Sean, who had earlier spotted in town, is already there. He tries to avoid her, but fails, and they sit together and fantasise about what a future together might have been like. They say goodbye. Romance is blossoming for Orla and Conor - or rather it would if it were not for the interruptions. Conor plans a romantic evening at Orla's cottage, but she has invited half the village to a party to celebrate keeping her job at Fitzgerald's.
It is still the night of the bonfire party. Niamh decides she must tell Ambrose that the marriage is over. The next day, Niamh leaves Kieran with Siobhan and spends the day with Sean at the lake, and they discuss their future. Sean tells her that he loves her. Meanwhile, Ambrose goes for a walk while engrossed in thought about his troubled marriage when he sees two people in difficulty on the rocks below. He shouts to tell them that he will try to find a way for them to escape the incoming tide. Elsewhere, a Frenchman called D'Argan, has come to challenge ""the head man of the village"" to a balloon race. Donal and Liam go to find Brian who is the closets they can think of. Brian is uninterested until he discovers that the event is to complete a race started 200 years previously, and that £40,000 is at stake. However, Monsieur D'Argan has forgotten that the French economy has had one major change since Napoleonic times.