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L.A. Sydney is giving testimony against Irina at a Joint Intelligence Committee Special Session, telling them of how Irina supposedly betrayed her and Vaughn, almost killing them. She visits her mother's empty cell, looking sad, and finds Irina's earrings. Jack finds her there and she thanks him for saving her life. They leave the cell block arm-in-arm. Later, Sloane is briefing the team on the assassination of Niels Hater, the "Austrian Connection," in broad daylight. Sloane believes it was the work of the Triad, an organization Hater was a member of. Apparently, the Triads killed Hater because he was selling information to SD-6 about 16 next-generation weapons they're developing. It is revealed the weapons are being stored in Budapest in a bomb shelter the Russians built under the magistrate's bureau during the Cold War. Sydney's mission is to gain access to the facility and gather intelligence on the weapons. When Sydney later tells Vaughn about her mission, he tells her that Devlin gave Jack operational approval based on his instincts on what happened in Madagascar. Vaughn expresses suspicion that Jack wired the explosives that almost killed the two of them in order to set up Irina. Later on, Sydney visits Francie at her new restaurant. They're having a good time dancing until Jack shows up with news for Sydney. He briefs her on her CIA countermission - giving Dixon "dummy files" to upload in Budapest while giving real access to the CIA. Back at CIA headquarters, Vaughn meets an old friend who tells him he picked up a U.S. national who had been smuggling explosives. This raises Vaughn's suspicions about Jack even more. He asks to meet the prisoner, who is mad about being arrested because, as he tells Vaughn, he was doing CIA work for Jack Bristow.


Budapest. Syd goes to the bureau in Budapest under the pretense of finding family geneaology, using a lip-gloss camera shooter thing Marshall designed to plant cameras in strategic locations, enabling Dixon to keep an eye on things. She soon sneaks into the server room and hacks the info for the CIA, giving Dixon the fake info. She goes on to take pictures of the weapons and is shocked to see that the weapons are actually children. They are being trained as sleeper agents.


L.A. At the CIA, a psychologist is telling Sydney about the traits that make good intelligence agents/spies. She also learns that these children were found using standardized tests to identify those traits. Apparently, the KGB had a similar program but nothing came of it. At SD-6, Jack is with Sloane in his office. He tells Jack that someone is using his guilt over Emily's death to send a message. Sloane reveals to Jack that his promotion within the Alliance had been contingent on Sloane killing Emily since she knew about SD-6. Jack promises to find out who could be using Emily's death against Sloane.
Sydney and Will have lunch together, talk about childhood, and she reveals to him that the CIA is seeking the death penalty against Irina.
Back at the CIA, Syd meets with Jack and Vaughn. Vaughn tells her that the man training the sleeper agents is Valerie Kholokov, someone Sydney is familiar with, knowing the man used to work for the KGB. Kholokov is now in Buenos Aires. She wants to go with the strike team and collect him. After she leaves, Vaughn confronts Jack about what he did in Madagascar. He promises to tell her if Jack won't.
That night, at Sloan's house, he gets out of the shower and sees a glass of wine on the bathroom counter. He calls security and they tell him the cameras were disengaged on site just a few minutes previously.


Buenos Aires. Syd and her team move in on Kholokov's house. After subduing him, she finds a three-dimensional puzzle that she puts together quickly, although she does not remember ever seeing it before.


L.A. Sydney wants to be hypnotized to figure out where she saw the puzzle before. She tells the psychologist it was like she was remembering the puzzle, not solving it. She speculates maybe her mother started programming her at an early age. Under hypnosis, Sydney sees herself when she was very young. She overhears her father saying he'll take care of Christmas, and she also sees the puzzle. She then sees herself, as a small girl, putting a gun together. When she looks up, it's not Irina she sees, but Jack. She awakes from hypnosis. Later, Jack finds Sydney out in the rain. She tells Jack he took away her choices in life by programming her to be a spy under Project Christmas. Syd has also figured out that Irina seduced Jack in order to gather information on that project and that Jack had Irina framed for Madagascar in order to protect his secret. After she leaves him, she goes to the CIA and seeks comfort from Vaughn.
At SD-6, a chemist has studied the wine Sloane found in his home and found an antidote to a certain poison. The same poison Sloane used on Emily. This leads Sloane to believe that perhaps Emily survived his attempt to kill her.