Megan Hathaway DiMera comes to Salem in 1984 with her adopted father Maxwell Hathaway, though she is secretly the daughter of Stefano DiMera. Megan had been the high school love of Bo Brady love that so deeply broke his heart that he was unable to allow himself to fully commit to Hope Brady. Megan thought Bo had left her, never answered her letters and broke her heart, as completely as he thought she had broken his. Bo thought Megan no longer loved him because she never answered any letter or spoke to her when he called. When they discover it was her mother who interfered to keep them apart, she became obsessed with winning him back and would stop at nothing in order to have him. Megan tells Bo that she discovered she was pregnant with his child, after he left town. She tells him that she gave the child up for adoption after her letters and pleas went unanswered, and because her mother convinced her it was the best thing to do in the circumstances. Bo initially softens towards her when he realises what she must've gone through. However, he begins to doubt her when it's revealed than Roman Brady had seen Megan in an abortion clinic.
Throughout 1984 Megan becomes more and more involved with collecting 3 Prisms for her father Stefano DiMera. It's revealed that Stefano is suffering from an inoperable brain tumour and the Prisms are the only way to restore his health. Meanwhile, Bo is keen to help Megan & recover their adopted child, and the search leads them to New Orleans, where it turns out, Megan has conspired to have Diane killed, steal her child, and set up dummy adoptive parents who then allow Megan and Bo to have 'their' child back. Bo saves Diane from the attempted murder and goes along with Megan's deception, in order to stay close to her and get to Stefano.
Andre DiMera, shows up in town and kills Max Hathaway. When he calls Megan in to see him, she's initially dismissive, knowing that Stefano always preferred her, when they were kids. She was Stefano's Gold Girl, and Andre was always jealous. However, once he reveals that Max is dead it puts a bit of fear into Megan's cocky attitude. There are wonderful cat fight scenes between Megan and Hope as Megan has Bo close by her side because of 'their child', Zachary. After the plane crash on the deserted island, which brings Bo and Hope closer than ever to each other, Hope exposes, on a live news report, that her marriage to Larry was a shame, ruining Larry career and destroying a valuable lackie for the Cartel that Megan was running, for Stefano.
In 1985, Megan plots to kill Hope Brady by electrocuting her in a hot tub at Chris' health club, The Body Connection. Megan's plan backfires when she overhears Larry Welch talking to a Russian contact about the 3 prisms Larry's father had invented. When Megan comes out and confronts Larry they fight. Megan threatens to expose this plot that Larry's is entangled with, a plot to blow up all of Salem, killing Stefano DiMera, in the process. Larry explodes at Megan's tirade and ends up killing her, unintentionally. Larry then discovers the electronic drawing and works out the fact the they are for rewiring the hot tub to electrocute. Larry, in a panic, picks up Megan's lifeless body and dumps her body in the hot tub, then returns to the closet and following the diagram, 'electrocutes' her. Megan is then found by Hope Brady, who becomes the prime suspect in her murder.