Bill Mackay, newly-appointed Head of CIB, creates NSW's first-ever drug squad to crack down on street dealers. Meanwhile, a desperate Phil Jeffs gets aggressive with Kate, leading to one of the bloodiest street fights Sydney has ever seen.
The rivalry between Kate Leigh and Phil Jeffs reaches boiling point, leading to a legendary street battle between their rival gangs. Jeffs is determined to put Kate and Tilly out of business by poisoning their cocaine supply and slashing their workers. The police create Australia's first drug squad to fight the deadly cocaine epidemic, and Kate starts an affair with a sexy young gangster, angering her faithful lieutenant Wally.