In the end, the group is salsa dancing, Austin with Ally and Trish with Dez. Since Ally decided not to go on tour with her friends, she reunites with them by joining them for a few days until her meeting with Ronnie Ramone. As they try to find out who stole the book, each person is found with a piece of evidence. Austin discovers that the advanced machines have ruined everything, making songwriting and music less personal. Ally and Trish tell Bobbie that Billie said he is the star of the show. Austin is more of a rebel type who doesn't follow the rules and is somewhat immature for his age, while Ally is conservative yet self-conscious.
Ally tries to choose everything for Lucy, but later Ally realizes that she taught Lucy to change in order to fit in. To make matters worse, Kira steps in on Trish's role as Ally's manager to book Ally a gig at a new beach club. Ally and Trish find out Austin and Dez have read the diary and plan an elaborate scheme for revenge to teach Austin a lesson. Meanwhile, Austin and Dez try to relax at a fake beach. When Austin and Ally are awarded prom king and queen, Austin confesses to Piper that he still has feelings for Ally and Piper encourages him to tell her. However, Trish still refuses to go to school. Ally, Trish, and Dez decide to sneak to the park and switch Austin's picnic basket so that Kira will not think that Ally is trying to sabotage their night.
The next scene shows Austin and Ally at an unknown restaurant, discussing how they can't stop being a couple. The group is able to elude museum security. Austin then accidentally opens Owen's cage, which causes him to fly out. After saying she doesn't care, she goes into the school auditorium to cry. Ally initially denies in anger, but later agrees to help him. Austin offers him to stay at their music factory.
Meanwhile, Trish puts Dez and Chuck in a competition to determine who is a better Santa Claus for Christmas, but Trish uses them to do her work. Austin convinces his friends to help him get a big comeback. Later, Austin finds a song that Ally wrote, which explains that she still has feelings for him. Meanwhile, Ally and Dez are assigned to be partners in chemistry class, much to Ally's dismay, while Trish uses flashcards to help Austin with Spanish, but he still struggles, so she hires a Spanish musician to help Austin since Austin knows a lot about lyrics. Austin was the first to rise with his career in Season 1 by getting his record deal. Austin is backed into the position of having to choose between his friends and the promise of fame.
Meanwhile, Carrie requests Trish and Dez's help to find a new job when she gets fired from Shredder's. At the end of the week, Austin sings a song he wrote to impresses his Spanish teacher of his knowledge. Trish invites Dallas to her party so that Ally can dance with him. Also, Ally isn't as believable a pop sensation as Austin was. However, the plan backfires when the show suggests bringing the show to Austin and watching him perform from the campground. Auslly fourth kiss In the final scene, back in the store, Trish reveals that Jimmy has officially dropped Austin from his label.
Trish organizes a radio interview for him, but he reveals he has never been in love, had a girlfriend, or been on a date, so he is exposed as a fraud. At Didi's party, everyone meets Didi's boyfriend, Chuck. After Austin accidentally says yes to all of them, they all get upset with him, leaving Austin wondering if he should just go alone. Austin's fortune comes true because he forgot to do his book report on Great Expectations by Charles Dickens. During the song, Dez sets him free, and Austin finishes his show and they both make up. They then all admit it would be awful if Austin weren't there with them. Throughout the episode, Austin and Ally purposely go under a mistletoe and try to kiss, but they are interrupted by Dez twice.
He said he came up with a fake name because he thought people would never take him seriously. Austin finally breaks up with Kira, but when they hug, Megan snaps the picture, and it makes the cover of Cheetah Beat. At the end, it turns out the whole episode is Dez's actual short story. Afterward, Dez reveals to Austin that he is moving to L. Their plan backfires when Ally is afraid she'll hurt their feelings and says she loves it. Little do they know, a baby alligator followed them to the boat, attracting Big Mama.
Ally reveals that her crush is actually a boy named Dallas who works at the cell phone accessory cart near Sonic Boom. They pull it off and see that Brooke was the thief. Heartbroken, Ally finally reveals the big news. However, the group finds out that he is a little too crazy of a fan and is freaked out about his obsession over Austin. Dez then breaks the couple up with the help of his friends, only making Chuck wanting revenge on them.