While playing tennis with the new girl in school, Olivia, Ned witnesses a classmate of theirs, Diana, collapse during her lesson. Diana is rushed to the hospital with Ned and Olivia in tow, but doctors fail to revive her. There by coincidence, Melinda watches as Diana's spirit emerges and briefly follows a nurse around, and is surprised when the spirit leaves the hospital with Olivia's family instead of her own. After Ned asks about the girls' history, Olivia explains that she and Diana used to be extremely close. Their mothers had become best friends after giving birth on the same day, but something had happened when the girls were about 8, and when Olivia's family abruptly moved to Texas, communication between the two girls ceased.
Melinda returns to the hospital to confront the nurse she had watched Diana follow right after she died, but just as she gets there she witnesses Diana haunt the nurse so badly that she falls down the stairs and is knocked out cold. Melinda and Jim investigate the files the nurse had been looking through before she fell, and discover that Olivia and Diana were accidentally switched at birth. The nurse had been on duty the night the accidental switch had occurred, and since discovering the mistake after Diana died she had been trying to get in touch with the families to let them know. Thinking that the truth will cause more damage, Diana demands that Melinda keep quiet.
Melinda then discovers that both mothers had been aware of this for years, and when Diana's mom confronted Olivia's about it 8 years earlier, she was too overwhelmed at the idea of losing the daughter she had raised and moved her family to Texas. Furious, Diana's spirit leads Olivia to the truth about everything, and Olivia is understandably distraught. Once both of their mothers are able to explain their motivation for keeping the secret was to avoid hurting Olivia and Diana, the two girls come to terms with everything and Diana crosses over.