The summer of 1987 finds David Meyers living in New York and working at a video production company, but his dream of becoming a filmmaker is stalled -- as is his love life; tennis pro Nash learns alarming news about the future of Red Oaks.
While David angles to get hired to direct a dog food commercial, Wheeler learns of a handsome rival for Misty's affections; Nash visits Getty in prison; IRS agent Terry pitches Sam on a business venture for which neither is qualified.
Wheeler considers an unusual proposition from one of his professors at Columbia; Sam decides to go into business with Terry, despite warnings from ex-wife Judy; Getty recruits David to help save Red Oaks.
Sam and Shirley run into trouble during a night on the town; David searches for a friendly face after a dressing-down by his boss and a fight with Wheeler.
Newly paroled Getty makes a last-ditch effort to save Red Oaks from the wrecking ball; Sam's side business suffers a significant setback; Misty and Wheeler both fend off unwanted advances; David makes a decision that he should have made months ago.
As the summer winds down, it's the end of an era for Red Oaks but the start of a bright future for David and his friends.