The series took place in the present day, and apparently after the events of the television story A Girl's Best Friend. K9 Mark III did not appear in these stories, as he had broken down and was in a box in Sarah Jane's attic; he was dismantled by Hilda Winters when she found the box.
The final episode of the series, Dreamland, was released only a few weeks before Sladen returned to Doctor Who as Sarah Jane in School Reunion. This return to Doctor Who led to the commissioning of a new TV spin-off series, The Sarah Jane Adventures, which in turn resulted in the audio series being cancelled after nine stories, with Dreamland unavoidably ending on a cliffhanger.
The "new series" and the TV spin-off both make reference the events of the dramas, with School Reunion displaying that K9 had been non-functional for some time and The Wedding of Sarah Jane Smith referring to Aunt Lavinia leaving Sarah the house.