Ji Young leaves the 'Mandarin Lady Pageant' venue holding Director Ma's hand, and Teacher Jung tries to stop Director Ma. However, Director Ma firmly takes Ji Young and leaves the venue. Ji Young quits her department store job and begins training with Jae Hee and Director Ma's other candidates.
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Hyung Joon, realizing that Ji Young's birthday could become an issue, tries to find a way to protect her as much as possible. Hyung Joon tries to develop and sell a new lip gloss under the name 'V Cosmetics', but this too is not easy due to Kang Shik's interference.
Ji Young hands the prize money to Hyung Joon, but he tries not to accept it. Hyung Joon's heart is both happy and complicated as he looks at Ji Young, who suggests they date secretly... Meanwhile, Ji Young prepares for the 'Miss Universe' competition. Hyung Joon asks Director Ma to take care of Ji Young, and Ji Young prepares for the international competition with Director Ma's support.
The winner of the 1997 Miss Korea 'Jin' is finally announced. Ji Young, learning that ViVi Cosmetics is on the verge of bankruptcy, is heartbroken to realize that Hyung Joon was not at the main competition because of the company.
Jae Hee goes into hiding after hearing her father Kim Suk Chul's proposal. Director Ma visits Kim Suk Chul and asks him to return Jae Hee, but instead faces a tax investigation. As the main competition begins, Oh Ji Young gradually starts to gain attention. However, due to Yoon's scheme, ViVi Cosmetics begins to face overdue promissory notes.
Hyung Joon officially raises the issue of the judges. The organizers eventually accept Hyung Joon's proposal to replace the judges after the corruption scandal erupts. With the pre-screening also invalidated, the competition among the candidates for the gala night intensifies, and Oh Ji Young also does her best to prepare for the gala night. ViVi Cosmetics begins product manufacturing with the investment received from Yoon, and Yoon withdraws, upon learning this.
Director Ma, having learned about Jae Hee's father, listens to the whole story and then sends a message to Rep. Kim Suk Chul, Jae Hee's father, asking him to leave Jae Hee alone. Hyung Joon and the ViVi Cosmetics team prepare a press conference to expose the change in judges.
After much struggle, Ji Young competes in the Miss Korea Seoul preliminaries and does her best, but feels overwhelmed by the offensives from Queen Beauty Salon and Seri Beauty Salon. Ji Young and the ViVi Cosmetics members go through a tense preliminary judging process. Meanwhile, Ji Young's family, realizing she went ahead with the Miss Korea pageant, appears at the preliminary venue and tries to forcibly take Ji Young away.
Ji Young, along with the ViVi Cosmetics members including Hyung Joon, begins serious 'Miss Korea' training. Meanwhile, Director Ma and Director Yang are surprised by the news that the Miss Korea pageant might not be held due to the IMF crisis.
Ji Young's family opposes her participation in 'Miss Korea'. Director Ma calmly begins to persuade the family. However, when the topic of 'breast augmentation surgery' comes up, the family and Hyung Joon strongly oppose it even more. Teacher Jung secretly takes samples of ViVi Cream to Kim Kang Shik of BaDa Cosmetics to negotiate.
Ji Young leaves the 'Mandarin Lady Pageant' venue holding Director Ma's hand, and Teacher Jung tries to stop Director Ma. However, Director Ma firmly takes Ji Young and leaves the venue. Ji Young quits her department store job and begins training with Jae Hee and Director Ma's other candidates.
Yoon offers Ji Young to be her 'sponsor', and Ji Young leaves in indignation and a sense of betrayal towards Hyung Joon. Teacher Jung tries to get money from Hyung Joon's mother but is flustered by her formidable demeanor. After many twists and turns, Ji Young steps onto the stage for the 'Mandarin Lady Pageant'.
Under Director Ma's guidance, Jae Hee undergoes special training to become Miss Korea, satisfying Director Ma with her excellent skills. Oh Ji Young and Kim Hyung Joon decide to participate in the Miss Korea pageant with different motives, first preparing for the 'Mandarin Lady Pageant'. Director Ma attends the 'Mandarin Lady Pageant' as a judge, where Ji Young is scheduled to compete.
Yoon promises to fully support ViVi Cosmetics if their Miss Korea wins, so Hyung Joon, Hong Sam, and Kang Woo search for beautiful women they know. Ji Young takes Director Ma's business card and visits Queen Beauty Salon.
Gu Wol Ryung, unable to remember his past, attacks Kang Chi. Ja Hong Myung is tormented as she watches the fight between her half-beast son and the divine beast Wol Ryung. Later, Ja Hong Myung takes refuge at the school and meets Yi Sun Shin.
Gu Wol Ryung suffers as a thousand-year demon. Jo Gwan Woong tells him Seo Hwa is the cause of all his misery and proposes a deal. Meanwhile, Dam Pyung Joon tells Kang Chi to remove his bracelet and defeat him in a real sword fight.
Ja Hong Myung is shocked to realize Kang Chi is her son. However, despite Jo Gwan Woong's persistent questioning, she pretends not to know Kang Chi. Meanwhile, Yeo Wool seeks out Bong Chool to find a way to rescue Kang Chi.
Kang Chi, chased by ninjas, accidentally enters a room and confronts Ja Hong Myung. She is impressed by him but soon orders him to be captured, even if it means killing him. Meanwhile, Chung Jo asks Yeo Wool if she knows that Dam Pyung Joon killed Kang Chi's father.
To find the suddenly vanished Yeo Wool, Kang Chi seeks out Wol Ryung in the forest. Kang Chi begins to fight Wol Ryung to save her. Meanwhile, Ja Hong Myung meets with Jo Gwan Woong, stating she wishes to buy one of his properties.
Gu Wol Ryung appears at the school and tells Kang Chi to give up on becoming human. After Wol Ryung attacks and vanishes, the school members mistake him for Kang Chi. Meanwhile, Ja Hong Myung summons Tae Seo and asks if he is one of Jo Gwan Woong's men.
Kang Chi is asked by Tae Seo to rescue Chung Jo. He worries about how Chung Jo will react to his half-beast nature. Yeo Wool comforts him, saying he is still Choi Kang Chi, regardless of his appearance. Meanwhile, the Hundred Year Inn staff hear that Chung Jo is to spend the night with Jo Gwan Woong.
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