Albums & Auditions" is the 19th and the final episode of Season 1. It first aired on September 9th, 2012.
Austin completes his first record and to celebrate its release, Jimmy Starr plans a big party. From the help of the rest of team Austin, Ally gets accepted to a music school and is so excited that Austin, Dez and Trish sent in an application on her behalf. But little did Trish, Dez, and Austin know this great school is in New York, forcing Ally to decide if she wants to move and leave her friends behind. Austin performs his new song, illusion and a surprise helps make her decision.
Austin's first album is officially released by Jimmy Starr, and Trish comes in announcing her new job as a mail delivery woman. She hands letters to Ally that she's already read, and one of those letters is a letter from MUNY, the best music university in the country. Ally discards it, claiming that she doesn't need it; she's happy where she is. The rest of Team Austin don't believe this, thinking that Ally definitely deserves to get to go to the music school. First they recover her application from the trash and try to fill it out for her. When Trish notices that their lackluster efforts to do so, she then decides to use the tactic of online applying after Austin and Dez put some foolish and vague entries on the paper Using Dez's lessons for a whole year that he won from correctly guessing the amount of candy in the jar, Team Austin, minus Ally, record some brief but useful statements from her as well as her playing a fairly tricky seeming piece impressively well. Piecing together a conversation with the talent scout from MUNY that gave Ally her stage fright in the first place, Austin, Dez, and Trish manage to successfully piece together an online application, and this time the talent scout is quite impressed with her.
Later on, Ally gets a letter from MUNY that not only accepts her; it also gives her a full scholarship! As Team Austin celebrate, thinking that Ally's going to the best music school in Miami, they then go over to the table where Austin's albums are on display. Meanwhile, Ally's father reminds her that she should find a way to reveal the fact that MUNY, is an acronym for Music University of New York, and they don't have a local campus.
A bit after that, Ally is contemplating how to tell her friends that she's leaving to New York. Nelson notices her depression during one of his music lessons, so he offers her to practice on him. She does, and inadvertantly reduces him to tears, causing him to run out crying as the rest of Team Austin come in, having noticed the crying lad. Convinced she has no other recourse, she claims to be writing a new song for Austin. When she sings a bit of a song, Dez claims "isn't her best." Realizing she may not be able to get the message to her friends, she invites Austin to sing the rest. He does, and freezes in shock after reading the lyrics that she's moving to New York. They all have a conversation, acting quite selfish by expecting her to not be leaving them. She then runs out in frustration and sadness.
At the food court, Austin Dez and Trish lament over the possibility of Ally leaving, but Dez actually turns out to be the one who convinces the other two members of Team Austin to her follow her dreams. Both are impressed over his insight, and ask how he came to such a conclusion, to which he replies that he both literally and figuratively put herself in Ally's shoes. At Austin's gig to celebrate his album out, he talks about Ally leaving, plays a video that he, Dez, and Trish made for Ally, and sings a slowed down version of the chorus of Without You. Ally then, having made up her mind, announces that she, as a matter-of-fact, won't be leaving to New York, claiming that her true dream is with her friends. They hug happily, and Austin resumes the party by perform the Michael Jackson influenced pop song Illusion. After the show, Austin and his team discuss the future of their shared career where anything could easily change.