Sister Jude drives to meet with a Nazi hunter, Sam Goodman. When she worries that someone might learn of her visit since she has only told her superior, Sister Claudia, Sam assures her that confidentiality is important. He explains that what he does is a calling and, when Jude asks if he's lost anyone, says that he's lost everyone. Sam shows her his concentration camp tattoo and asks for the files on Arden. She tells him that Arden has been accused of being a SS doctor, Gruper, during World War II. Sam goes over the files, which have very little background information, and explains that after the war the U.S. intelligence agencies bypassed Truman's orders and recruited Nazi scientists, giving them fake backgrounds. He asks if Jude has seen Arden without his shirt on. She says that she hasn't and Sam explains that SS officers all had a tattoo of their blood type on their arm as a means of identification. When Jude wonders if she should try and confirm the tattoo's existence, Sam tells her to do nothing and avoid raising any suspicions.
At Briarcliff, Anne Frank drags the wounded Arden into Jude's office. Mary Eunice is going through her superior's desk and breaks off when Arden staggers in. He tells her to go and Anne lets her leave. However, Frank comes in behind Anne and orders her to surrender at gunpoint.
When Anne wakes up later, she finds herself in a straitjacket strapped to a bed. Jude comes in and asks about the gun she stole, and Anne admits that she took it from Detective Connors during his earlier visit. The patient insists that Arden has a monster in his lab and must have gotten rid of it, but Jude notes that Anne shot Arden in the leg and he was immediately taken to the hospital after her capture. The nun warns Anne that Arden will be back soon and may perform experiments on her, and demands to know what she saw. Anne tells her to look in the lab but the nun says that she went there with Frank and they found nothing.
Mary Eunice comes in and informs Jude that Anne's husband, Jim Brown, has arrived. Jude meets with the man, who explains that the patient is his wife Charlotte Brown. Her infant son's constant crying drove the high-strung woman temporarily insane. Jude admits that Anne convinced her and Jim explains that Charlotte read the book The Diary of Anne Frank and then saw a play based on the novel. She became obsessed with the Jewish girl, tattooed her own arm, and started talking about all the Jewish babies who were killed by the Nazis. When Jim said that her son needed her, Charlotte told him that there were other babies who needed her and started compiling Nazi records in her study.
Thredson, who has been listening outside the door, comes in and suggests that Charlotte has post-partum depression. Jim insists that Charlotte needs to come home to a stable environment but the psychiatrist warns against it. Jude decides to release Charlotte and has the orderlies dress her and bring her down. Charlotte continues to insist that she is Anne Frank. Jim finally manages to get through to her by showing her a photo of their son and explaining that he needs his mother. As Jim takes Charlotte away, Thredson warns Jude that she's making a mistake. As she goes, Thredson asks her about the rumor that she has ordered Grace's and Kit's sterilization. The nun confirms that it's true and ignores him when he warns her that it's illegal.
Kit and Grace wait in their cells and talk. Grace says that she's not afraid but Kid doesn't believe her. Kit remembers how he and Alma discussed having children but now he realizes that they never will. When he apologizes for getting Grace in trouble, she assures him that the only one to blame is Jude. Mary Eunice arrives and tells Kit that that Jude has changed her mind about sterilizing him because of his confession. As she has an orderly take Kit away, he asks about Grace and Mary Eunice assures him that she hasn't been forgotten. Once Kit is out of earshot, Mary Eunice tells Grace that she'll still be going under the knife in the morning.
As Grace waits until the next morning, an unearthly light blasts around and through the door and something enters the cell.
As Lana gets her daily medications, Thredson comes over and tells her that they're leaving after dinner. He tells her not to be late and then calls in Kit for a session. Kit begs him to help Thredson but he says that he can't do anything until he finishes with Kit. The psychiatrist explains that he's going to record Kit's confession and then play it back to him so that he can comprehend what he's done and accept it. They begin and Kit admits that he murdered his wife.
Grace is on a table in a chamber filled with white light. A pregnant Alma stands over her, telling Grace not to fight it. Aliens then begin cutting at Grace.
Jude calls Sam and leaves a message telling him that she was wrong. Arden comes in and asks what she was talking about, but Jude ducks the question. He asks what she saw in the lab but Jude dismisses it as nothing and says that she was just following up on a complaint. The doctor informs her that he's going to press charges... against Jude, for letting Charlotte get a gun and then refusing to punish her for shooting him. Jude says that she hopes that they can start anew but Arden refuses, suggesting that she grovel. The nun refuses and Arden informs her that he's going to call Monsignor Howard and have him dismiss her.
When Arden returns to his office to change the bandage on his leg, Mary Eunice comes in. She assures him that she's seen naked men before and helps him remove his pants. As she changes the bandage, Mary Eunice apologizes for her behavior on the night of the storm, and Arden assures her that they'll never mention it again. He thanks her for her help disposing of Shelley and Mary Eunice says that she did it to protect them and make sure that his work continues... and that she can help Arden once he's put in charge of Briarcliff.
At the town's elementary school, one girl hears moaning noises from the outside stairs to the basement. She investigates and sees Shelley, her face falling apart. The girl, Peggy Cartwright goes to get the teacher. When they come back, Shelley has crawled halfway up the stairs and everyone runs screaming in terror.
Jim brings Charlotte back to Briarcliff. While the orderlies take Anne to a cell, Arden goes in with her. Meanwhile, Jim meets with Jude and explains that he can't trust Charlotte alone with their baby. She grew worse as the baby kept crying and finally tried to smother it before Jim stopped her. He asks Jude to take Charlotte back and asks for Thredson to examine her. Jude isn't interested but agrees to let Jim talk with Thredson if he wants. She calls Frank in and sends him to bring Thredson up.
Thredson meets Lana, gives her a coat to wear over her patient dress, and tells her to walk out past the guard with him. The guard, Jimmy, doesn't notice and they go outside as Frank comes down and calls Thredson's name.
As Jim arrives at Charlotte's cell, Arden comes out. The husband thanks Arden for not pressing charges and Arden tells Jim that he sees no reason for punitive actions. He does suggest a different approach and offers to do it that night. As Jim considers his offer, Arden says that it will make Charlotte a new woman.
As Lana gets into Thredson's car, Frank runs out and calls to the psychiatrist, saying that Jim wants to see him. Thredson refuses, saying that he doesn't work there anymore and he never did. He gets in the car and drives away with Lana as Frank goes back inside.
Arden takes Charlotte to his lab and prepares to administer a lobotomy as Jim looks on. The doctor assures Jim that a lobotomy is a simple medical procedure and Charlotte is perfectly safe in his hands.
Jude is in her room praying to God when Frank comes in and tells her that Lana has escaped. The nun talks about how she had a pet squirrel that died when she was a child and prayed for it to come back to life. When her mother found it, she threw it away and then told her daughter that God never answers prayers the way that the person wants. Jude admits that she's done at Briarcliff and Frank tells her that as a woman, she never had a chance.
Arden puts Charlotte under and then uses a metal pick to perform the lobotomy, inserting it via the eye socket.
Jude dresses up and drives into town. She goes to a bar and lets a man buy her a drink.
Thredson takes Lana to his apartment, pointing out that they can't go to her home because it's the first place the police will look for her. He assures Lana that he's made a morning appointment with Detective Spears and that once they report everything, the police will close Briarcliff down. As Thredson goes to get a glass of wine, Lana dials her friend Lois to ask about Wendy, but Thredson hangs up. He reminds her that he's broken the law for helping her escape and that they can't afford to go public until after their meeting with Spears.
Lana joins Thredson for a glass of wine and he tells her that she'll win a Pulitzer for his story. She realizes that Thredson is acting oddly and proposes a toast to Briarcliff's destruction. As Thredson turns on a lamp, Lana realizes that it's made out of human skin. The psychiatrist offers her mints from what appears to be a bone made from a human skeleton's skullcap. Lana declines and asks to use the bathroom. Thredson gives her directions and Lana goes down the hall, trying to find any unlocked door. There is only one and she goes in. The room is a workshop and there are numerous cutting tools on the wall. Thredson comes in and casually tells Lana that he makes lamps using human skin. When she prepares to bolt, Thredson pushes a button opening a trapdoor beneath her, dropping her into the basement.
When Kit goes to the common room, he sees Grace sitting in a chair, bleeding from her groin. He realizes that Thredson broke his word to help Grace and tries to go to her, but Byers and Connors arrive. They put Kit under arrest, informing him that they have Thredson's report and the taped confession. As they take him away, Grace yells that she saw Alma, alive, and Kit tries to go back for her. The detectives haul Kit away, ignoring his pleas to go back.
Lana wakes up in a tiled refrigerated room, tiled to the floor. She calls for help but no one answers, and sees Wendy lying on the nearby floor. When Lana rolls her over, she discovers that Wendy is dead, her corpse slowly thawing out. Thredson comes in and admits that he had hoped to keep Wendy fresh, and that he didn't remove the head and skin because he needed the corpse. He tells Lana that they're going to continue her therapy and orders her to kiss the corpse of her lover. As Lana starts to scream, Thredson takes out his Bloody Face mask, points to the teeth, and assures Lana that Wendy won't bite because he removed her teeth.
Jude wakes up in the morning. The man from the bar is sleeping next to her and the nun slips out without waking him.
Jim comes home and finds Charlotte holding their son and cleaning up her board of Nazi research. Smiling, she tells Jim that she's making a pot roast and it'll be ready soon. He notices a trash box filled with her files and Charlotte tells him that it's trash. As he takes it out, Jim asks Charlotte if she's happy and she assures him that she is, and tells her husband that she'll clean up the rest later. They leave with a few photos still on the board... including one of Adolph Hitler, with Arden standing behind him.