Right before Rachael is about to tell Gus she is headed back to England for six months, Shawn and Gus learn that their favorite radio DJ, Crock Daniels, has been shot and killed. They rush over to his studio to investigate. There, they discover that Syd the sound engineer got knocked out by Crock's attacker, but is still alive. They then meet Miranda Sherrod, the station's attractive manager who immediately takes a liking to Gus. She leads them to their first suspect: a man named Dean Ballou, Crock's old morning show partner.
Upon investigation of Dean, they learn that he's not their guy. Dean leads them to a few possible suspects: Crock's co-workers at the new station. Dean explains that they had to take a huge pay cut when Crock was hired. Shawn and Gus head back to the radio station, but before they can get to questioning a few of Crock's former co-workers, Miranda tells them that she is shutting down the station. She explains that Crock was her only moneymaker and without him the station is going to tank. Shawn and Gus get an idea: to keep the station open by hosting their own show.
Shawn starts out as the host of the show, but after only seven minutes of being on-air he's already run out of material. So in a desperate move, Shawn asks Gus, live on-air, how he feels about his girlfriend leaving him for six months. Gus, not knowing this fact, freaks out, and a juicy, on-air drama starts to unfold. Suddenly, they start to get callers and people interested in what they have to say. Their show is actually starting to become successful and as a result, Miranda decides to keep the station open.
Later that day, Shawn and Gus question some employees at the station about Crock's murder. Everyone appears to be clean, and they learn that the only person who had money to lose from Crock was Miranda. Shawn and Gus know they need to interrogate Miranda, but knowing she's probably ten steps ahead of them, Shawn suggests that Gus go on a date with her to get some answers. Miranda ends up manipulating Gus into having more of a romantic date than Gus had originally planned. Miranda lays the seductive flirting on thick, but Gus manages to keep it together and stay focused on getting case-related answers from her. By the end of the date, Gus learns that Miranda wasn't hurting for money at all and that there is no way that she is Crock's murderer.
Miranda sees a lot of potential in Gus and suggests that he host the show instead of Shawn. The next day, during Gus's radio show, "The Smooth Storm with 'A Player Named Gus,'" he gets a caller named Laura. Laura loves Gus's suave, understated DJ persona, so much so that she continues to call into the show throughout the day. After the show, Gus walks back to his car, feeling good. Then out of nowhere, gunshots ring out and Gus's passenger window gets hit. Gus believes that the shooter is the same person that killed Crock. Shawn theorizes that it may have been a caller - a caller that appeared on both Crock's caller‐log and Gus's caller‐log. Shawn checks it out and sees that Laura is the only common caller between Crock and Gus.
Lassiter, Juliet, and Shawn go to question Laura and discover that she is a total fan-girl for radio shows, and that she has a stalker named Bob. She describes Bob, and they have a sketch artist do a rendering of what Bob looks like.
Upon further investigation of Bob, they realize that he was not a fan of Crock's show and that Bob had called in to give Crock a piece of his mind right after Laura got done flirting with Crock on-air. Shawn theorizes that Bob was jealous of Laura's obsession with Crock, so Bob killed him. But now that Laura has taken a liking to Gus's on-air persona, Shawn fears that Gus will be Bob's next target. But since they don't know where Bob is, they decide to set up a sting to draw Bob out that involves Gus going back on the air and Laura calling into his show. Laura and Gus agree to the plan.
Laura and Gus begin to flirt with each other on-air, and shortly after, Bob calls in making threats to Gus, saying Laura is his girl and no one else's. Lassiter, who is staked out in the police van, tells Gus to keep Bob on the line until he gets a trace.
Lassiter gets a trace on Bob's call and realizes that he's not headed for Gus; he's actually headed for Laura's house where she is stationed with Juliet. They race over to Laura's house and find Juliet passed out from being hit on the head by an unknown attacker. They find Laura hiding in a bush outside the house down the block. Upon further investigation of Laura's house, they realize there was no forced entry. In Laura's bathroom, Shawn and Gus discover Laura's medicine cabinet is filled with anti‐depressants and anti-psychotic drugs belonging to her. From this, Shawn realizes that the real killer is actually Laura who has multiple personality disorder and that one of her personalities is Bob.
Later, Gus and Rachael come to terms with the reality of having a long-distance relationship for six months. They want to be together, but both sense that this could be the beginning of the end for them. They say goodbye, and Rachael leaves Gus' place for the airport. Moments later, there's a knock at the door. Gus thinks it's Rachael, but in reality it's Bob - the real Bob that Laura described as being her stalker. Laura does have multiple personality disorder, but Bob was not one of her personalities. This happens at the same time Lassiter and Jules learn from Laura's doctor that her medication has been working and that none of her personalities have surfaced for the past two years. They know Bob is a real person now and that Gus is probably in danger. They race over to Gus's place just in time to see Gus take Bob out. Bob is arrested and Gus is safe.
The title refers to the 'cardinal sin' of broadcasting, the failure to have any content (sound or pictures) which is termed 'dead air', although there is obviously the morbid pun concerning the DJ's death.
Names Laura and Bob are probably a loose reference to the prequel movie Twin Peaks: Fire walk with me. In the movie Bob is a murderer, that can possess a person which manifests as a multiple personality disorder, which was the wrong conclusion made by Shawn and Gus in Dead Air. Bobs main goal in Twin Peaks is to possess Laura. Becuse he is unable to do that, he kills her.
The gallery for Dead Air can be found here.