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Seattle

• Mount St. Helens erupted catastrophically on May 18, killing 57 people, leveling 230 square miles of forest, and dusting eastern Washington in ash — the most destructive volcanic event in U.S. history. 
• Microsoft, newly relocated to Bellevue, signed the deal with IBM that would put MS-DOS on the IBM PC the following year. 
• The Seattle Mariners ended their fourth season; Steve Largent and the Seahawks were quietly building toward their first playoff run.
• Pacific Northwest Ballet entered its Kent Stowell / Francia Russell era, which would define the company for the next three decades.

The United States

• Ronald Reagan defeated Jimmy Carter in a landslide; the Iran hostage crisis dragged through the campaign. 
• John Lennon was assassinated outside the Dakota in New York City on December 8. 
• The "Miracle on Ice": the U.S. hockey team beat the Soviets at the Lake Placid Winter Olympics.
• The Empire Strikes Back deepened the Star Wars universe; The Shining and Raging Bull were released.
• CNN launched on June 1 as the first 24-hour cable news network.

The World

• The Iran–Iraq War began on September 22 and would grind on for eight years. (Reference, Britannica)
• Solidarity, an independent trade union led by Lech Wałęsa, formed in Poland's Gdańsk shipyards — the first crack in Eastern Bloc rule. 
• 65 nations boycotted the Moscow Summer Olympics over the Soviet invasion of Afghanistan.
• Robert Mugabe's ZANU won elections in newly independent Zimbabwe.
• Namco released Pac-Man, the most successful arcade game of all time.