In the real world, Kathryn Nolan brings David home and points out that when they first bought it, he wasn't very impressed with it or with the windmill that came with it. She asks him what made him change his mind about the house and he avoids the question. Kathryn takes David inside where their friends and family have gathered to welcome David home. Dr. Whale is there and tells David to have fun and let things come back to him.
Emma and Henry are there, and Henry explains that David doesn't remember he's Prince Charming because the curse hasn't worked on him yet. Because of David's memory loss, the curse can't implant false memories in his mind. Henry wants to jog David's memories by getting him together with Mary Margaret. David comes over to thank them for rescuing him earlier. When he stabs an hors d'oeurve with a toothpick, Henry asks him if he's ever used a sword. David asks if Mary Margaret is coming and Emma tells him that she couldn't make it.
In the kitchen, Regina tells a nervous Kathryn to stop preparing food and go be with her husband. Kathryn admits that she has her husband back but she doesn't really, and Regina says that she lost someone once and there's no bringing him back. The mayor tells Kathryn that she has a chance, and Kathryn thanks her and admits that she's not used to having a friend. Regina says that she's not used to it either. When Kathryn goes out, she discovers that David has left.
David goes to Mary Margaret's house and sees her putting up a bird house. He offers to help and then asks if she resigned from the hospital because he told her how he felt. Mary Margaret reminds him that he's married, but David says that the person who married Kathryn is a different man, and he's choosing Mary Margaret. He's sure that she feels the same, but Mary Margaret says that he feels that way because she's the one who saved his life, and tells David to leave it at that.
In the fairy tale world, the Prince is fighting a burly knight near the edge of a cliff. They spar back and forth and the Prince finally kills the knight. The watching nobles applaud and King George boasts of his son's victory. However, the other king, Midas, points out that the knight was just a man and wonders if the prince can kill a dragon. The Prince insists that he can kill any creature and offers to assist in return for payment to his kingdom. A guard steps forward and carefully removes Midas' glove. He touches the Prince's sword, transmuting it into gold as a down payment., and then departs. As the Prince prepares to leave, the knight revives long enough to stab him through the chest, killing him.
Later, King George and his men gather to take the Prince's body away. An aide warns that they need to find another warrior to kill the dragon before Midas learns of the prince's death and refuses to pay. The King says that he has asked for help, and Rumplestiltskin arrives. Once they're alone, Rumplestiltskin reminds King George that he gave him his son as part of a deal, and the King offers him anything to bring his son back. The imp wants a magic wand belonging to the Fairy Godmother, patron to the King's family, and asks for her whereabouts. King George agrees and Rumplestiltskin warns that he can't resurrect the Prince. However, he can have the Prince slay the dragon… or rather, his twin brother.
In a quiet field, James, the man who will be Prince Charming, watches over his sheep.
Mary Margaret is at home scrubbing plates as Emma looks on. She suggests that her roommate take it easy and figures her frustration has to do with David. Emma pours Mary Margaret a drink and tells her that if something you want to do is wrong, it probably is. All Mary Margaret can do is stay strong and let David figure out his life.
At his home, David is going through photos of himself and Kathryn. She comes in and notes that he's letting hair grow out, and invites him to join her in bed. David suggests that they just sit and talk, and Kathryn leans forward and kisses him. After a moment, David pulls away and insists that it isn't right.
James chases a sheep into its pen and his mother Ruth returns from the market. She says that it was interesting and explains that she had a talk with a grain merchant who has a daughter ready for marriage. James resists and figures that the grain merchant has a dowry, and his mother admits that they need money to save the farm. However, her son insists that he wants to choose the woman he will spend the rest of his life with. When Ruth says that he can't have everything, Rumplestiltskin arrives and says that perhaps he can. Ruth tells her son that she had a twin son and gave him to Rumplestiltskin, and the deal forbade them from ever telling James. Her husband died carrying the guilt to his grave.
James sends Ruth into the house and Rumplestiltskin explains that the king needs a prince to slay a dragon. He tells James to play the part and the King's knights will take care of everything. Rumplestiltskin avoids telling James what he gets from the deal, but assures him that the King will make sure that Ruth will keep the farm. James considers and Rumplestiltskin tells him to make the right choice.
Mary Margaret is at the diner having breakfast when Dr. Whale stops by and asks if she resigned because of him. He admits that he never called her after their date and apologizes, and says she can find him if she needs him. As he leaves, Regina comes in to talk to Mary Margaret. She tells her that she doesn't belong with David. When Mary Margaret says that she's done nothing, Regina tells her that David left Kathryn. Mary Margaret admits she has no idea what happened and Regina realizes she's telling the truth. She tells Mary Margaret that it's in her best interests to stay away from David, and suggests that Mary Margaret let David remember who he was.
James puts on his armor and goes to meet with King Midas. Midas assures him that if he succeeds in killing the dragon, he'll be a legend. The King's knight comes over and makes sure that James is properly armored. When James asks how he'll fight the dragon, the aide reminds him that he'll stay outside while they go into the cave and kill the dragon. They hear the dragon roaring in the mountains and go to fight it.
In the mountains, the knights find the devastation near the area. The king's knight tells James to remain outside with two men while they go into the cave. As they wait, James asks one of the men if he knew his brother the Prince, and the knight admits that the Prince was the bravest man he ever knew. Screams ring out from the cave and James insists on going inside, shoving past his guards. He drags the injured knight clear as the dragon flies past and into the sky. It comes down and fries James' two bodyguards, and he runs to their corpses to get the discarded golden sword. When the dragon comes after him, James lures it into a crevasse, just as he trapped a sheep earlier, and then cuts off its head with Midas' golden sword.
David comes to see Mary Margaret at her classroom. She insists that she doesn't want to destroy his marriage, and David says that he can't pretend to feel about Kathryn the way that he does about Mary Margaret. He insists that the man who married Kathryn is gone, and the man he is now wants someone else. Mary Margaret ushers him out but David asks her to meet him that night at the bridge where she found him. If she doesn't come, then he'll know she doesn't want him.
At the sheriff's office, Graham offers Emma a doughnut in return for her working one night shift. He explains that he volunteers at an animal shelter and needs Emma to fill in that night. Mary Margaret comes in and tells Emma that David left his wife for her. She wonders how to let him down and Emma tells Mary Margaret to go for it now that he's actually made a choice. When Mary Margaret worries that Regina will be unhappy, Emma tells her that's an even better reason.
At his house, David packs and then checks the time while fingering his wedding ring.
King George and James bring the dragon's head to Midas. Satisfied, Midas says that the head will serve as a reminder of the bravest warrior he has ever met. The King asks for the payment and Midas says that he needs a hero to reunite the kingdoms. He then brings in his daughter, Abigail, and says that she's his most valuable treasure. Midas will only give her to a worthy hero, and Abigail says that James will do. James starts to refuse, wishing to go home, but King George whispers to him that if he refuses, Midas will refuse to finance the kingdom. Further, the King will kill James and his mother and destroy their farm. He tells James that he knows he'll make the right decision.
David is walking down the street, trying to find the toll bridge, and Regina finds him. When she learns that he's meeting someone, Regina realizes that he's made his choice. She gives him directions to the toll bridge past Mr. Gold's pawnshop and wishes him luck, and tells him that she hopes he finds what he's looking for.
At the toll bridge, Mary Margaret waits for David.
David comes to the pawnshop but realizes that Regina's directions don't match what is there. He goes in to ask for directions, and notices a mobile made up of unicorns. Mr. Gold steps out and offers to sell it to him, but David wants directions. The pawnbroker gives him directions and David starts to go, but notices a windmill. Mr. Gold says that he's had it there forever, and David realizes that it belonged to him because his memories have started to come back.
James goes back to see his mother, who has received everything the King has promised. He finally tells her that he has to marry Abigail, and Ruth tells him that he has to choose to be free. James warns her that Midas can never know of their ruse and that if he runs away, the King will kill her. He admits that he's accepted Midas' offer and that he came there to say goodbye to her. James admits that she was right and that he can't have everything. Ruth gives him her ring, explaining that true love goes with it and that he will grow to love his wife.
David runs up to Mary Margaret and tells her that he remembers his life with Kathryn and how he felt about her. He explains that he has to honor his marriage, but that he also has intense feelings for Mary Margaret. Mary Margaret says that he shouldn't have led her on and walks away, crying.
Emma is driving on patrol when she sees someone coming out of Regina's house. She knocks the thief down and discovers that it's Graham, sneaking out of Regina's bedroom. Emma says that she's disgusted and wished that Henry knew what his mother was doing. She tells Graham that she won't be working nights anymore and walks away.
David returns home and tells Kathryn that he remembered the windmill, and that they weren't at a good place when he disappeared. He explains that he needed to work things out but would have come back, but then the accident happened. David says that they should see what happens between them and Kathryn lets him in.
James and Abigail meet with their fathers. Midas sends them to their new home while he prepares for the celebration. King George draws James to one side and approves of him making the right decision. James calls him "Father" and takes his hand, and then departs with Abigail via the scenic route. As James contemplates his mother's ring, King George tells him that he's on the road to true love. They travel through the woods in the royal carriage while Snow watches from the woods and prepares her ambush.
Dr. Whale comes to see Mary Margaret at the diner, but she doesn't want to talk. He points out that it's easier to talk to someone you don't care about, and Mary Margaret asks him if he ever gets into a situation where he knows he's going to get hurt but he does it anyway because that's who you are. Dr. Whale says no because he never does what's expect. He offers to buy her a drink and Mary Margaret tells him that he can buy her two.