Tad is in for the shock of his life when Diana, the Chandlers' nanny, is revealed to be Dixie. She tells Tad she did not want to come back to Pine Valley because she lost Kate and is not sure if she wants to reunite with Tad. Tad proposes to Krystal again, but it is clear he has feelings for Di. At a memorial service for Kate, Krystal comes in with shocking news. Di is not Dixie, but an inmate Krystal met in prison. Di maintains her identity, even taking a DNA test. Tad continues to believe Di, ending his engagement with Krystal. Di is somehow linked to the crime lord, The Dragon, who wants Julia dead. Di gives Stuart Chandler (David Canary) a note to be given to JR only if she did not come back. Tad convinces Stuart to give him the letter. Tad finds Di and Julia standing over The Dragon's dead body. After making sure Di is safe, Tad reveals he knows the truth. Di is not Dixie, but her younger half-sister. Di's deception further estranges JR and Tad. On Christmas Eve 2005, Di leaves town to visit a very much alive Dixie in Vienna.