Blue Water High is the ultimate teenage adventure in the ultimate teenage environment. Beautiful beaches, crystal clear water, long sunny days. The cafe spills onto the streets, the streets spill onto the foreshore and the music spills across everything.

Anna's feeling the pressure and challenges Joe to a surf-off; if he wins, she'll leave. Despite the treacherous conditions, Anna surfs like a champion. She wins the respect of her team-mates, and Bec is grudging approval.

The school competition falls on the same day as a Solar Blue function and Matt puts himself on the line to attend both. Matt's commitment to the Academy is questioned — until Matt points out they have a commitment to school as well.

Fly is homesick and accidentally runs up a huge bill on Anna's mobile. She secretly starts work at a carwash to try and pay it off but breaks the machinery, ending up deeper in debt. She's about to quit when the team comes 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.

Edge is losing surf competitions because he won't take Simmo's advice to do fewer crowd-pleasing aerials, and more judge-pleasing manoeuvres. 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 and Bec puts her own life at risk to rescue him, there appears to be a spark between the two tough surfers.

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 about 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. When she catches him stealing surfboards, the team pressures her to call the police but she knows this could destroy their relationship.

A shark scare brings everyone's greatest fear to the surface. Matt's seemingly unshakeable, until his father Ewan unexpectedly arrives. Matt has his own plans for the future but his fear of disloyalty to his father affects his surfing.

Perri's parents have cut off her credit card. When a rival sponsor offers her a modelling contract, she thinks about leaving Solar Blue Academy. The modelling contract falls through at the last minute so Perri's back to square one.

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 realise there's a difference between acceptable risk and irresponsible behaviour.

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 organises a party to cheer her up, making the others take Fly on a surfing trip so it can be a surprise.

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 traumatised that she vows never to rescue anyone again. It's Matt who gives her the confidence to go 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.

Deb asks the team to judge each other in a surf competition, so they conspire to score each other highly. Heath's keen on the new girl so a jealous Fly deducts points from his score and spoils the scoring plan.

Fly's losing surf contests so surfs to win at a regional girls' competition. The boys are supposed to be support crew, but get caught up in a battle of practical jokes. Perri is 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 jet ski without asking and damages it accidentally. It all comes to a head when Heath sees his dented jet ski.

Bec is 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 has been chosen because she knows the competition organisers and give her the cold shoulder. When Edge points this out during a massive fight with Bec, she takes a risk surfing in huge swell and ends up in hospital.

Perri's feelings for Edge come to a head when she's spooked by a tramp hiding out in the board shed. When Edge accompanies her back to the shed in search of a lost ring, she kisses him. Edge is quite confused, but wants to forget it; after all he's keen on Bec. Consumed with guilt, Perri tries to make things 'normal' with Edge, and that's when Matt and Bec find out.

Heath is pressured by a ruthless surf magazine editor to secretly take 'behind the scenes' photos of the Academy couples and their romantic antics. Deb's also keeping close watch on the starry-eyed pairs, worried there's too much fooling around and not enough training. Simmo's solution is to throw extra training at the team, in the vain hope they'll be too exhausted for a social life.

Heath persuades Anna to sneak down the coast with him for a kiteboarding competition. Anna wins the comp and is faced with a dilemma. She's also won entry into the Junior team — should she give up surfing and return to her first love?

Bec negotiates for Blue Water to hold the local surf comp. They agree to pay for everything but a band for the after party. The team's own band could play — but Fly's musical ability threatens to turn it into a disaster.

Heath's perpetual lateness affects his year ten certificate exam. Simmo has no choice but to deduct points which means he might not even qualify for the wild card in the comp. The team helps Heath claw back the points he needs.