Jack and Holden convince Emma to let Julia and JJ move onto the farm. Holden tells Julia, who refuses, but later accepts, realizing it will be best for JJ. Meanwhile, Emma counsels Jack, who has made his decision to stay with Carly, but is still having trouble juggling the two families. Carly and Lily discuss Lily and Holdens on-going marital difficulties. Carly points to herself and Jack as an example of what love can overcome, and urges Lily not to give up. Later, as Jack and Holden prepare to tell Carly and Lily that Julia and JJ are moving into Emmas, an unsuspecting Carly walks into Emmas kitchen and finds herself face-to-face with Julia. Paul gingerly suggests to Rosanna that she might be behind the strange occurrences at Fairwinds, but she adamantly denies it. Paul agrees to talk to Hal and bring Wills doctor into this. Meanwhile, Will commiserates with Alison at Als Diner. Elsewhere, after a near miss with Hal, Barbara sends a hypnotized Emily out on another haunting mission. Will returns to Fairwinds and sees an intruder, who he recognizes as Emily, as she thrusts the doll she was planting at Will and gets away. Paul and Rosanna find Will with the incriminating evidence in his hands! During a publicity photo op at Metro, Mike gets roped into questions he doesnt want to answer. Katie rescues him and they talk. Henry distracts Jennifer so Katie and Mike can have more time alone together. Later, some nurses come in from the hospital and spill that Katie got her old job back. A suspicious Mike demands to know if Katie is staying in Oakdale for good. Henry places a phone call, pretending to be Simon and saves Katie from the hot seat. A relieved Katie hands the phone out to Mike, saying that Simon wants to say Merry Christmas.