In Brooklyn, New York, a bald man with no eyebrows enters a diner and orders a roast beef sandwich with 11 jalapeños and a glass of water at room temperature. He watches a construction site across the street and starts writing in an unknown language in his notebook, while checking a pocket watch. From time to time he observes the crew through high-tech binoculars. The ground starts to shake and a gas main explodes at the construction site, toppling over a crane. The bald man casually drinks his water, walks outside, moves to the edge of a now-gaping hole, makes a phone call, and informs the person at the other end that "it has arrived."
Walter and Peter are at their hotel and Walter is working out the recipe for root beer at 3 in the morning. Peter is less than thrilled. The next day, he goes to Olivia and says that he's tired of dealing with his father and isn't happy remaining in one place so long. Olivia insists that they need Peter to help with Walter. Further, that Walter would rather go back to the mental institute rather than work with them if Peter isn't there.
Broyles calls the team to a warehouse where the source of the explosion in Brooklyn is stored: a bullet-shaped metal cylinder, about 2' long. Broyles explain that a similar object was found at an explosion in Quantico in 1987, and that a Colonel Henry Jacobson headed the investigation. Peter agrees to stay for this one last assignment while Olivia goes to see Jacobson, a family friend who lost his wife. He extends his condolences about John's death, then relates how the object appeared at Quantico. The object was vibrating at a specific pattern, the same one as the new object. Jacobson determined the object was sending a signal but couldn't determine to who or what. The object then exploded down into the earth and disappeared. He gives her his files but warns her that she should stay as far away from it a possible.
At Harvard, Walter and Astrid attach sensors to the cylinder and then Walter uses a tuning fork to set off a particular vibration.
At the FBI warehouse, a man in a stocking cap emerges from his car with an odd-looking gun and shoots down the outside guard. He shoots his way in using explosive bullets and enters the lab, only to discover that the cylinder is gone.
That night, Olivia is woken up by a phone call. There's nothing but static and a man saying "Hello." Olivia believes the man is John, but when she has the call traced, the operator says that no call came in on the cell phone.
The next day, Walter studies the object further while Olivia notices a man in the 1987 photos from Jacobson. She spots a bald man and identifies him in other photos from their previous trip to a hospital.
Jacobson answers his doorbell and finds the stocking cap man at his door. The man stuns him unconscious.
Olivia takes the photo of the bald man to Broyles, who reveals that they've just discovered the same man in the photos after a year of work. They've been unable to get an ID but the man, who they call the Observer, has been at the scene of various Pattern events. They're interrupted when Broyles gets word of the attack on the warehouse. As Walter conducts sound experiments on the cylinder, Olivia calls Peter to inform him they're moving the cylinder to a secure facility. Walter seems aware that someone is coming for the cylinder and asks Peter to get him aluminum foil to shield the cylinder's frequencies. Peter agrees and goes to get the foil. Walter then asks Astrid for a syringe… and injects her with it. Peter returns a few minutes later to find Astrid unconscious and Walter and the cylinder gone.
The stocking-cap man places electrodes from a device up Jacobson's nostrils and into his brain, then plugs himself into the device. He interrogates Jacobson about the woman who came to see him, and can read his mind through the device. He tortures Jacobson with electrical jolts until Jacobson "thinks" the answer. Satisfied, the stocking-cap kills Jacobson.
Walter is in a diner buying a root beer float when a man sits opposite him: the Observer. They know each other and the Observer says he can't touch "the beacon" but thanks Walter for hiding it. He promises that Walter will soon have answers.
Later, the FBI locate Walter walking down the highway and bring him in. Peter and Olivia come to question him and he admits he remembers taking the cylinder. However, he can't tell them where it is, and he hid it from someone who is coming to find it. Walter describes his "friend" the bald-headed man and Olivia recognizes the description. When Peter snaps at his father, Walter snaps back and says he shouldn't act like his mother, questioning his judgment. An angry Peter leaves, insisting he's no longer needed. Olivia reports to Broyles that Walter knows the Observer.
Peter returns to the laboratory to pack his belongings. He gets a call from an associate who can offer him a job somewhere far away from Boston. As Peter hangs up, he's unaware that the stocking-cap man is watching him from the shadows.
Astrid returns to the lab later and informs Olivia that there are signs of a struggle. Olivia checks the campus security footage. Meanwhile, the stocking-cap man uses the same device on Peter and starts to interrogate him telepathically, asking where the cylinder is. Meanwhile, Olivia has a photo of the stocking-cap man and shows it to Walter, who doesn't recognize him. However, Walter warns that even though he didn't tell Peter where the cylinder was buried, Peter knows.
The stocking-cap man continues to interrogate Peter, telling him to think of happy childhood memories and his father's hiding places. The man then gets a thought from Peter of where the cylinder is and drives out into the countryside with Peter in the trunk. He goes to a cemetery and takes Peter along, then start digging at the grave of Robert Bishop, Peter's grandfather.
Following Walter's directions, Olivia arrives at the cemetery as the stocking-cap man recovers the cylinder. He hears Olivia approaching and flees into the woods, leaving a tied-up Peter behind. Olivia and the stocking-cap man exchange shots and she brings the man down. Leaving the cylinder behind, she checks the stocking-cap to make sure he's dead. Behind her, the cylinder begins to glow then drills itself into the ground.
Peter, having cut his hands free, approaches through the woods and sees the Observer, telling someone on the phone that the "departure is on schedule." Peter tackles the Observer, then tries to get answers from him. The Observer starts repeating every word that Peter says, then starts speaking Peter's words before Peter can. The man then takes out a strange gun and stuns Peter with it.
After Peter recovers, Olivia takes him to the hospital while Charlie releases Walter and sends him back to the hotel. Before he goes, Walter tries to apologize to Astrid without success.
Olivia checks on Peter but runs into Browles, who says there's no sign of the cylinder and he doesn't think they'll find it. They've ID'd the shooter as John Mosley, a mob killer from Seattle. Olivia then picks up Peter, who insists that something is going on and the Observer was somehow connected to his mind. Olivia didn't see the Observer and thinks Peter may be in shock, but he insists that he's now going to stay with the team until he can get some explanations. She accepts and gives him his security badge, identifying him as a civilian consultant.
That night, Peter asks Walter how he knew where the capsule was buried when Walter never told him. Walter explains that Peter knew it because Walter knew it, that the information was passed along by proximity. He then explains that when Peter was young, father and son were driving home on Thanksgiving when their vehicle plunged into an ice-covered lake. Walter was unable to rescue himself or his son, but the Observer rescued them. He could read Walter's thoughts and made it clear that he'd need Walter one day. When Walter activated the sonic pulse on the cylinder in his laboratory, he realized that the time had come to repay the favor.
Olivia returns home and fixes herself supper. She turns and sees… John, seemingly alive and well.