Heath witnesses sabotage and controversy at the final heats for places at the Solar Blue Surf Academy. Fly's board is broken by a rival and Heath has to convince Solar Blue to give her a second chance. Bec's furious when her brother misses out because the last heat is cancelled. Instead the final place goes to a German kiteboarder, Anna, who didn't even have to surf for it.

Bec draws the rest of the team into debate about Anna's place at the Academy. Feeling pressure to prove she belongs, Anna challenges Joe to a surf-off; if he wins, she'll leave. When Joe picks a dangerous local break for their competition, Bec's forced to choose between loyalty to her brother and fairness to Anna. Despite the treacherous conditions, Anna surfs like a champion. She wins the respect of her teammates, and Bec's grudging approval.

The team is received like heroes at their new school, in anticipation they'll surf in the interschool competition. But Deb forbids it, because their Solar Blue sponsors only want them to surf major events. When the school competition falls on the same day as a Solar Blue function, Matt puts himself on the line to attend both. Andrew, the Solar Blue boss, questions Matt's commitment to the Academy - until Matt points out they've got a commitment to their new school life as well.

Fly's homesick and feels like she doesn't fit in. Calling home, she accidentally runs up a huge bill on Anna's mobile. To pay it off without Anna finding out, she secretly starts work at a carwash. Hiding from Deb, Fly breaks the carwash machinery and ends up deeper in debt. She's about to quit when the rest of the team come to her rescue.

Anna's last on the Academy's scoreboard, and despite Simmo's coaching, her surfing is deteriorating. Homesick for Germany, Anna can't see how she'll ever compete with the others. She books her ticket home and gives away precious surfing points until Perri reveals a confidential Solar Blue file. Inside is a letter from her old coach saying she'll never make it - all the motivation Anna needs to stay. Perri agrees to give her extra coaching, and Anna's back on track.

Edge is losing surf competitions because take Simmo's advice. He's been told to do less crowd-pleasing aerials, and more judge-pleasing maneuvers. Edge goes kite-boarding in rough seas after only one lesson, because he's sure he's got the talent to handle it. After he crashes and almost drowns, Bec puts her own life at risk to rescue him. Edge is forced to rethink his attitude.

Heath's failing at school, and copies Matt's project in desperation. When they both lose school marks and surfing points for cheating, Matt feels betrayed. Matt's been mystified by some rare local fish, but Heath discovers their secret. He thinks outside the square, making a project on the fish that wins back Matt's friendship, and their school marks.

Bec's friendship with her brother Joe has suffered since she made it into the Academy, and he didn't. He's hanging out with a new crowd who are determined to make life difficult for the Solar Blue team. She catches him stealing the Academy's surfboards, and is pressured by the rest of the team to inform the police. But Bec knows that her relationship with her brother could be destroyed if she does.

A shark scare at Blue Water Beach has everyone questioning their greatest fears in the surf. Matt's seemingly unshakeable, until his father Ewan unexpectedly arrives. He's here to see if Matt wants to stay surfing or help run the family crayfishing business. Matt has his own plans for the future but is afraid of being disloyal. Under his father's scrutiny, the normally calm Matt loses his nerve. He starts surfing terribly, giving Ewan all the more reason to think he should leave.

Perri's parents have cut off her credit card because they're in financial trouble. When a rival sponsor offers her a modeling contract, she thinks about leaving Solar Blue Academy. At the last minute, the modeling contract falls through and Perri's back to square one. Meanwhile the normally taciturn Edge has surprised everyone by becoming a waiter at a local café.

Matt and Edge are vying for top position on the Academy scoreboard and their friendly competition quickly gets out of control. Egged on by Heath, and the arrival of a pretty new girl, they challenge each other to a dangerous surfing stunt. When the stunt almost kills Bec's little brother Ben, Matt and Edge realize there's a difference between acceptable risk and irresponsible behavior.

Fly's having strangely romantic dreams about Heath, and she's desperate not to give away how she feels. On the eve of her birthday she complains to Anna about missing her friends back home - and about being treated like a little kid. Anna organizes a party to cheer her up, making the others take Fly on a surfing trip so it can be a surprise. After a comedy of errors trying to avoid Heath, Fly ends up locked in a caravan with him, and has to own up to her feelings.

Perri rescues someone from the surf, only to discover that he's an adrenalin junkie who's risked both their lives to seek attention. She's hailed as a hero but is so traumatized that she vows never to rescue anyone again. It's Matt who gives her the confidence to back on patrol. He teaches her some self-defence techniques so she won't have to risk her own life to save someone else's.

Heath falls head over heels for the new girl, and skives off from training. The rest of the team doesn't suspect a thing, but Fly's been watching him very closely. Deb asks the team to judge each other in a surf competition, so they conspire to score each other highly. Heath's devastated to find that his new love already has a boyfriend. He surfs badly in the competition, and a jealous Fly deducts points from his score. She spoils the scoring plan and Deb and Simmo realize the competition has been rigged.

Fly's losing surf contests because she's too passive, and is being elbowed out of the way by more aggressive competitors. With Simmo's encouragement, she surfs to win at a regional girls competition. Bec's nose is put out of joint in the process. While the girls compete, the boys are supposed to be support crew, but get caught up in a battle of practical jokes. Perri's not laughing when she's caught in the crossfire.

After pushing herself to the limit with a hardcore training regime, Anna decides its time to be a normal teenager. The others are busy making a video presentation to win sponsorship for some new boards. On a date with Bec's brother Joe, Anna loses track of time. She misses the deadline for the video, and almost ruins her friends' chances for sponsorship.

Perri's diabetes is revealed when she collapses into a coma. Deb's forced to tell Solar Blue, who are nervous about sponsoring a surfer with a potentially life-threatening condition. Matt campaigns on Perri's behalf, and she's allowed to stay. The only obstacle left - convincing Perri that diabetes won't stop her from being a champion.

Edge alienates the boys with his 'win at all costs' attitude at a triathlon event, by not helping Matt when he falls off his bike. To teach him a lesson, Heath doesn't bother to pick up a race marker when it falls over, and Edge takes the wrong path, getting completely lost in the National Park.

Edge assumes Bec will be his partner for the school formal. Bec, sick of being taken for granted, invites Heath to be her partner instead. Chasing some big waves just before the dance, Edge takes Heath's jetski without asking and damages it accidentally. It all comes to a head when Heath sees his dented jetski. The night ends in a fistfight on the dancefloor, and Bec's left wondering just what she saw in Edge.

Bec's invited to a big wave competition in Tahiti, but she's nervous about surfing heavy waves, and at the same time trying to get Edge out of her head. The other girls suspect Bec's been chosen because she knows the competition organizers and give her the cold shoulder. When Edge points this out during a massive fight with Bec, she takes a risk surfing in massive swell and ends up in hospital.