During a pre-credits flashback sequence, Gale excitedly sets up an underground meth lab for drug kingpin Gus. Gale asks Gus about the blue meth being produced by Walt, who at this point is not yet working for Gus. Gus explains he has reservations about hiring Walter, but Gale insists Gus hire him because of his superior product.
After the opening credits, the story returns to the present day, where Walt's partner Jesse has just shot Gale to death on orders from Walt, who insisted that if Gale is dead, Gus could not kill them as he had planned because he would have nobody to produce meth for him. Gus' henchman Victor arrives at Gale's apartment and finds him dead, surrounded by neighbors who just called the police. Victor finds a stunned Jesse sitting in his car outside and forces him at gunpoint to return to the meth lab, where Gus' employee Mike is holding Walter hostage. Mike, who is concerned that Victor was seen by bystanders at the murder scene, calls to inform Gus of the events. Victor, who has often watched Walter work, starts cooking meth himself to prove they do not need Walter and Jesse at all. Walter grows concerned when Victor proves better at the process than he expected.
Meanwhile, Walt's wife Skyler observes Walter's car in her driveway and, not wishing her son Walt Jr. to see it, drives it a few blocks away to conceal it. Concerned about Walter's apparent disappearance, she calls their lawyer Saul, but he is too busy checking his office for listening devices, having grown paranoid from Walt's falling out with Gus. Skyler hires a locksmith to break into Walt's condo for her, claiming it belongs to her. When he hesitates to do so without identification, Skyler cries and insists her purse was stolen until he finally agrees. She finds little of interest inside the condo. Elsewhere, Skyler's sister Marie struggles to maintain her composure while caring for her bedridden husband Hank, who is still recovering from the multiple gunshots inflicted in the attempt on his life. A cranky Hank lashes out at Marie and scoffs when she speaks of the progress he is making at rehab, but Marie nevertheless maintains an outwardly positive demeanor.
Gus arrives at the meth lab but says nothing. Walter soon launches into a nervous, rambling monologue of excuses and justifications, trying to convince Gus he needs Walter and Jesse alive. He claims it is Gus who is ultimately responsible for Gale's death, not them, and insists Victor cannot produce the meth Gus needs. Gus maintains his silence, even while changing into hazmat gear and selecting a box cutter while Victor grins in anticipation. Never changing his demeanor, Gus suddenly slices Victor's throat, startling the others. Through the killing, Gus simultaneously punishes Victor, while delivering a stern message to Walter and Jesse. Gus drops the body to the floor and coldly eyes both Walter and Jesse to ensure his message was received. Gus quietly returns to his street clothes, then walks out of the lab, pausing only to say, "Well, get back to work," before disappearing. Later, Walter and Jesse dispose of Victor's body, the gun that killed Gale and the box cutter in a barrel of hydrofluoric acid. During breakfast later, Walter insists to Jesse that Gale's death was necessary, but expresses concern that Gus will kill them at his next opportunity. Jesse doubts this, believing it will be too much trouble for Gus to find another drug manufacturer, and that both they and Gus understand the situation: neither can kill the other, so they might as well make them wish they were dead. The episode ends with police investigating Gale's apartment, where his lab notes sit waiting to be discovered.