In the middle of the night, Astrid wakes up in the lab and hears a signal from the radio they took from the apartment. She finds Walter sitting in the dark and he stares at her and says that her hair is beautiful. Astrid asks him if he fixed the radio but Walter continues to stare vacantly in space and tell her that her hair is beautiful.
Olivia wakes up to discover that Peter is unable to sleep He complains about a headache from the removal of the Observer tech but assures her that she doesn't need to get him anything for pain. Astrid calls them into the lab and shows them the radio, which is repeating a coded pattern that they can't identify. Since Donald left the phone in the apartment, they wonder if he's trying to contact them. When Peter and Olivia notice Walter acting more oddly than usual, Astrid explains that he dropped acid. They're unaware that he's hallucinating the presence of his deceased lab assistant, Dr. Carla Warren.
A small green pixie visits Walter while Peter tries to communicate with his father. Walter tells him that he took black blotter acid that he had hidden in the storeroom, and explains that he took it after Nina promised to remove the pieces of his brain that were causing him to revert to his old arrogant self once he completed the plan. Peter objects but Walter insists that they're running out of time and that he doesn't want to revert and lose them. He tells the others that two nights ago he woke up at 3 a.m. and discovered that he was walking out the door without knowing why or where he was going. Carla, listening in, tells Walter that Walter's arrogant self knows and Peter realizes that his father is referring to his original self. Walter is desperate to complete the plan before he reverts entirely, and tells Peter that he needs to figure out the tones on the radio.
Peter takes Walter into the next room while Olivia realizes that it could take weeks to decode the signal. As Peter returns, Olivia suggests that they track the signal and he contacts Anil to see if he can provide them with the necessary text.
Walter is in his room lighting a candle using a match that the pixie brings him. Still hallucinating, Walter goes into what seems like an empty lab and watches as a red pixie appears. He then turns on his Betamax player and watches a tape of Alin explaining to the others how the tech works. Astrid interrupts him and Walter realizes that he's in the lab as Anil gets read to explain to the others how the tech works. Alin uses the tech to determine that the signal is coming from Willington, CT, while Carla tells Walter that there's something of his hidden in the lab.
Peter and Olivia drive to Willington the next morning and trace the signal to the forest. As they proceed on foot, Peter admits that he's embarrassed that he broke his promise to leave Olivia again and says that he doesn't deserve her. They kiss and Olivia spots a camper in the woods. They investigate and find the long-dead corpses of two Observers and a loyalist, dead in a firefight. In the camper they find the driver's corpse, a prototype Observer gun in his hand. They figure that there was a shootout and the driver, who might be Donald, killed the three intruders but died of his wounds. Peter tracks the signal and discovers that it's coming from a relay mounted on a tree. When he returns to the camper, Olivia shows him the corpse's wallet. It has an ID for Sam Weiss.
The agents radio Astrid and have her ask Walter if Weiss was involved, but he doesn't remember. They figure that Weiss was protecting the relay point and died in the attempt, and recalibrate the tech to continue tracking the signal. Meanwhile, Carla keeps giving Walter hints on where to find the hidden item. He demands something more specific and Carla tells him that he's looking for his secrets. She reminds him that he once told her that he was the only god in his lab, but Walter insists that he's no longer that man. Nina argues against Carla, insisting that Walter is a different man. However, Carla doesn't believe it and says that the real Walter would eagerly go to the Observers just to show them how smart he is. She tells Walter that he should get ready to leave, but Walter insists that he'll keep his promise to his son.
Frustrated, Walter goes to the office only to find Carla waiting for him. She says that he's very warm and he realizes that there's a false panel in the floor. Inside is a journal and as he contemplates it, Nina tells him to put it back. Carla transforms into a charred corpse and tells him that she came there to burn the book but died in the fight she started. The green pixie tries to stop Walter but he brushes her out of the way and decides to just peek in the journal.
Walter finds himself in a taxi in New York City. While the cabbie goes off to find change, Walter reads through the journal and discovers that it contains all of his old ideas for inventions. There's a reference to "Black Umbrella" in the journal and Walter asks Carla why it's there. A waiter opens the cab door and offers Walter more LSD, which he accepts. Carla points out that he was willing to create an entire universe to play God in, but Walter insists that he isn't that man. Taking in his surroundings for the first time, Walter realizes that they're parked outside of the Observer Precinct in Manhattan. Carla tells him that he sneaked out of the lab and that he's in denial, which is why she's there. She represents all of the secrets that he's repressing. Walter tells Carla that he wanted to cry because of her death so he made himself a different man by removing the offending pieces of brain matter. However, she tells him that he can't hide from what he really is no matter how much he clings to his current self. As Walter prepares to get out of the cab, an Observer approaches the vehicle...
... and Walter finds himself in a car parked at a pier. Astrid helps him out and takes him to the dock where Peter and Olivia are renting a boat from a man, Gerald. They've traced the signal's point of origin to Thimble Island and need a boat to get there. Walter looks at the island and sees a glowing green castle on the horizon, while Peter tells him that they may finally locate Donald.
As they go down to the boat, Walter starts to panic and Peter calms him down. A Loyalist patrol boat pulls up and the guards demand the team's papers. Peter tries to stall while the others get Walter out of the line of fire. Olivia and Peter open fire and dispose of the patrol, and then the group leaves in the rental boat. They land on the island and follow the signal source to a home. A man, Richard, steps out on the porch with a shotgun and orders them away. Olivia says that they are there to talk to Donald, but the man claims not to recognize the name. Peter asks if he recognizes Walter and Richard says that he doesn't. Before he can shoot, the child Observer from the apartment comes out and looks at them. Richard's wife Carolyn comes out as well and tells her husband to put the gun down. He refuses and demands the password, since the person who received the signal would know it.
As Walter tries to remember the password, a giant hand swoops down, picks him up, and drops him onto a cow. He rides into a factory and join forces with a frog, a dog, and a sea horse. The pixie then leads Walter to a tree guarded by a knight with Walter's face. The frog eats the knight and Walter takes the key and opens the trunk of a tree. Inside is a black umbrella.
Walter says the password, Black Umbrella, and Richard lets them into the house. Richard explains that they helped the resistance when the Observers attacked and Donald approached them after the eighth month and left the child with them. Donald said that the child, which the couple named Michael, was a critical part of a plan to defeat the invaders. He gave the couple the transmitter and told them to activate it every five days. Richard admits that he didn't want to after a while because they came to see Michael as their own son. Carolyn explains that Michael hasn't aged or spoken since they took him in, and that they know Michael is intended to do something great.
The team takes Michael back to Harvard and Olivia offers him a cup of cocoa. She explains that her daughter loved hot cocoa when she was young and Michael takes a sip and smiles. Olivia then asks if he knows her and he nods affirmatively. Peter wonders how it's possible since they met in an alternate timeline, but Olivia figures that the Observers experience time differently.
In the lab, Walter watches hallucinations of the events in the past: Carla in the lab trying to stop him, Elizabeth begging her husband to stay with her instead of working in the lab; the passage through the wormhole; Peter in the lake. The memories fade and Walter burns the journal. Carla appears and warns him that it's too late because he's already remembered everything. Nina disagrees, telling him that he has to fight to hold onto himself now that he has Michael. However, Carla tells him that there's nothing to burn and it's too late for him to fight. Walter looks down and realizes that the journal has disappeared. He glances up and sees his old, arrogant self standing before him.