Angel decides to let Stephen/Connor go his own way in the hopes he will come back to him of his own free will.
Holtz tells Connor to go be with Angel, to learn what how much of Angel is a part of him so that he may fight against it. Connor is not thrilled with this idea at first, but he goes to the hotel. When Cordelia has a vision, Angel invites Connor to go with him to save a girl at a club.
When they show up at the club, they find Justine. She has been set up to be killed by vampires by Lilah. Lilah invited Wesley there to see his reaction to Justine's imminent demise so she could tell if she was wasting her time trying to convert him to the dark side. Wesley and Lilah see Angel show up with Connor and watch them fight off the vampires and save Justine. Angel and Connor fight well together and form some kind of bond. Afterwards, they play around together in the alleyway, almost like father and son. Holtz see them together.
Connor returns to Holtz who tells him that he thinks he should go be with Angel permanently. Connor is very opposed to this idea. He is still very attached to Holtz. Holtz insists and Connor leaves. When he does, Gunn and Fred see him and Holtz through the doorway. They realize that Holtz was the other thing that came through the dimensional door.
Anyway, Connor, still very mad about his situation, goes back to the hotel. He talks nasty about Lorne and when Cordelia intervenes, and starts to talk to him about her being half demon, he pulls a knife on her. She grabs his hand turns all glowy on him and expunges all the nastiness in his body that he had absorbed from the hell dimension. He breaks down crying on her shoulder for a brief moment.
When Fred and Gunn come back and tell Angel where Holtz is, he has them take Connor out somewhere to distract him so he can go confront Holtz. Cordelia tries to talk him out of lying to his son. Angel goes anyway. When he gets to Holtz, they have big heart to heart where Angel apologizes for killing his family and Holtz admits that Connor should be with Angel instead. Holtz gives Angel a letter to give to Connor and says he'll never see him again.
Fred and Gunn take Connor to the ocean. He overhears them talking about Angel going to confront Holtz and takes off running back to the hotel. Before he can get there, Holtz has Justine take an ice pick and jab him in the neck twice so that he dies. When Connor finds the body, it looks like a vampire killed him.
In the meantime, Cordelia totally blew off Groo and didn't even notice he was gone all day. It becomes clear that he's catching on to the fact that he's playing second fiddle to Angel in Cordelia's heart.