You don't actually see Dan and Nathan til the latter part of the episode.. Nathan arrives at the diner and gives Dan a picture of Lydia, and the baseball from Jamie's first hit(game winning double) Dan:"Baseball?" Nathan:"He loves it."
Nathan turns to leave, and Dan thanks him.
Later, there are two scenes with Dan sitting in the diner.. the second scene you hear Paul doing a voice over.
and that's it. OTH definitely needs more Dan.
I've read on two sites that Paul is returning next season, but I can't begin to tell you if that's accurate.