The residents of Paterson's Ridge are given a look into the future when a hot-air balloon crashes. The pilot charms the townspeople - especially Michael, who is inspired to build a glider.

Danni and her father Matt argue after he tells her he wants her to go to a ladies finishing school. Objecting, Danni runs away to the cabin and spends the night, only telling Michael where she was going.

Emily goes into labour while in the cabin shortly after Matt finds her with Nancy. Colin gets ready to fight in the duel, writing a farewell letter to Emily.

The Morrell clan turn up to settle an old score with Matt. As luck would have it Matt has left town leaving either Rob or Colin to fight in the duel - if they don't, the Morrell's will burn the town down.

After a long absence, Victoria Blackwood returns to Patterson's Ridge, only to find that the land is gone and she has been left with nothing.

Dave Turner arrives at Emily and Colin's to claim Josh and take him back to his family. Emily is upset and Josh believes that now Emily is pregnant, she and Colin won't want him around.

Foundation Day has arrived and with it brings Henry Wagner to town. Henry is in Patterson Ridge to catch a rabid dog. Danni agrees to meet up with him to help him hunt the dog.

Duncan leaves town just before Rob returns. In town, the stables are going up for auction and Rob wants to buy them, but can't afford it on his own. He must try and convince Colin that they are a good buy.

Miss Hannah Kirov opens a Russian tea room at the back of the general store to generate more income. The hotel owner though isn't happy with the business he is losing, so he cuts his prices in half.

Duncan Jones, an old friend of Rob's turns up while Rob is away. Danni is suspicious of him though as he seems nervous. The Race is being re-run and none of the McGregor's are going to be competing.

Macalister tries to persuade his wife to return by destroying the economy of Paterson's Ridge, but Matt finds a weak spot in his plans.

A fair is held in aid of church funds and members of Patterson Ridge all make donations. When a hand-written love poem is found in a second hand book, gossip around town is rife as everyone tries to work out who wrote the poem.

During Paterson Ridge's charity sale, a book belonging to Mr. Elliott is accidentally sold. Kathleen finds - and publishes - a love poem that falls from the book but who is the lady of Herbert's dreams?

When Matt and his family visit Melbourne, they become embroiled in a political plot between English and Russian royalty.

Danni falls in love with a stranger who arrives in Paterson's Ridge. His presence seems to have an encouraging effect on all the romances in town but his gift to make others happy masks his own unhappiness.

McGregor takes a stand between an aboriginal man who is accused of the murder of a teenager, and the victim's father and two brothers who want revenge.

Matt and Kathleen's wedding day is marked, and could be marred, by a woman who appears at the church and wants to buy a horse from Matt. Matt finds a riderless horse and goes off to investigate, without telling anyone.

A young Aboriginal boy must choose between his heritage and an education when his father arrives in Paterson's Ridge.

Montana and Rob find an American surveyer who has been shot. They help him and he reveals he was shot by a man spying on Montana. When Montana claims that she has seen someone loitering by her property and her horses are poisoned, Rob is determined to protect the woman he has more than neighbourly feelings for.

When Matt allows visiting soldiers to camp on his land, Michael and Josh get swept up in the romanticism of the military - and Josh sets his sights on carrying a gun.

Danni McGregor secretly enters the electrifying and dangerous Snowy River cross-country race — an annual race created in honour of her father's famous ride years before. Then, a mysterious American appears, determined not only to win the race at any cost, but also to challenge Matt McGregor himself in the original death-filled ride down the mountainside.

Kathleen's husband, who was thought to have perished eight years ago, returns to make amends with Kathleen and Michael for his deceit.

Josh is found in the woods but refuses to talk to anyone. Two graves are found, of his parents, so Emily and Colin take him in. But then people come to take Josh away - will he talk and tell the truth in time to stay?

Matt is blinded in a mining explosion and is aided by Kathleen and the family as he struggles to regain his sight. Meanwhile, Colin reveals a dark secret from his childhood.

Matt suggests to Jack Kelly that he work for Kathleen in exchange for food and board. Reluctantly, he agrees to do so. Jack and Kathleen argue from the start, but obviously need one another. Oliver Blackwood continues his efforts in trying to undermine Kathleen's hold on her land. Rob and Luke court danger to win Victoria's affections, chasing down a wild stallion. Matt must intervene when Danni is severely punished by the new teacher.

Matt McGregor finds he has a competitor for Kathleen's affections when his mate, Steve Page, arrives at Paterson's Ridge and becomes smitten with the fiery Kathleen. Kathleen's new Braham breaks loose, and she gets caught in the middle of a sudden storm looking for it. When she hasn't arrived back by nightfall, Matt rides off in search of her. Meawnile, Luke starts prospecting for gold on his father's old claim.

Victoria Blackwood and her chaperone return from shopping in Melbourne, but their train journey ends when the tracks are washed away in heavy rain. Rob is sent to collect them and shares a passionate kiss with Victoria. Matt and Kathleen have a disagreement about Sean Carney's education and Emily donates a new organ to Colin's church.

Matt's old flame Anita Hargreaves returns to town after 25 years away just as her father suffers a heart attack. Matt is dumbfounded by her hospitality towards him — and Kathleen's coldness. A bitter Anita forcloses on Matt's loan, only to learn that she had not been jilted by Matt years ago, but tricked by her father. Luke strikes gold.

Danni McGregor and Michael ride into a herd of brumbies. In the confusion Danni is thrown and falls into a disused mine shaft. Michael goes for help, but becomes lost in dense scrub and falls unconcious from cold and shock. Anita sees Matt's obvious affection for Kathleen and realises trying to rekindle their lost love could be useless. News of Luke's gold strike spreads.

The arrival of a travelling boxing troupe in Paterson's Ridge, led by "Dandy" Jim O'Rourke, has the community, including the McGregors, ready to try their hand. A visiting pianist is suspected of being a con man.

A trapper wanders into town with news about Joanna's father.

Joanna Walker is determined to find her half-brother and Kathleen O'Neil agrees to accompany her in the search.

The notorious Reilly gang turns up in Paterson's Ridge in an attempt to evade being captured by the state troopers. While Matt and Rob are away mustering, the Reillys arrive at Langara and take Colin, Emily and Danni captive.

Matt and Kathleen intervene and devise a plan to save the town's sawmill from bankruptcy.

The arrival of a family of Russian refugees in Paterson's Ridge creates friction with the locals, just as the completion of Colin's new church is uniting the community.

Matt is held responsible by an angry landowner when the government decides to take his land to dam the valley.