Henry is reading a comic at the store when Ava Zimmer comes over and asks him what he's reading. She says that they go to the same school together, and introduce her brother Nicholas. They invite Henry to hang out with them, but as they leave, the store owner, Mr. Clark, stops them and accuses Henry of shoplifting. He finds stolen candy in Henry's backpack and Henry realizes that Ava distracted him so that Nicholas could put the stolen goods in the backpack.
In the fairytale world, the Woodcutter is cutting down a tree and his daughter Gretel comes over to offer her help. The Woodcutter tells Gretel and her brother Hansel to get kindling. As they go, the Woodcutter gives him their compass so that they don't get lost. Later, the two children finish gathering kindling and go back to their father. They find where he was working, but there is no sign of him. They hear him make a noise and run to the road, where two black knights grab them and take them to the carriage that they're escorting. The Evil Queen emerges and demands to know what they're doing in her forest.
Mr. Clark calls in Regina and tells her that Henry was shoplifting. Henry denies it and Regina points out that Henry knows better. She figures that Ava and Nicholas took the goods. Emma comes in and asks about Henry, and Regina tells her to mind her own business. When Emma points out that she's the sheriff, Regina leaves with Henry while the children admit that their parents couldn't pay the phone bills. Ava begs her not to arrest them.
When Gretel tells the Evil Queen that they've just lost their father, the Queen tells her men to arrest them. They try to run but the Queen teleports in front of them and easily captures them with animated roots. She admits that they're brave and tells them that if they help her, she'll find their father.
Emma takes the children to what they claim is their house. However, as Emma starts to go in, Ava says that her parents would be too embarrassed if she comes in. Emma tells them that she can tell when someone is lying and Ava sticks by her story. Seemingly satisfied, Emma watches them go to the doorstep and then drives away. Once she's gone, the children run from the house and take the back alleys to an abandoned house. They hear someone moving upstairs and go up, and find Emma waiting for them. She asks where their parents are and Ava admits that they don't have any.
Emma brings the children to her apartment and asks Mary Margaret if she knows them. She admits that no one knew that they were orphans, and their mother died and there's no record of their father. Mary Margaret realizes that Emma didn't report them, and Emma says from personal experience that the system will throw them into homes where they get paid to keep them. Ava overhears them and worries that they'll be separated, and begs Emma not to let them be split up.
Emma goes to the hall of records and talks to the clerk, Mr. Krzyszkowski. He has her fill out the forms but then discovers that the documents have been removed by Regina. Emma goes to see Regina, who says that she reported the children to Social Services. When Emma explains that she wants to find their father, Regina points out that there's no record of him and they have no choice but to put the children into the state foster system. The mayor has confirmed that the children will be put into two separate homes and tells Emma to have them in Boston by that night. Emma refuses because she promised but Regina says that she shouldn't make promises that she can't keep.
As the Queen leads the children through the woods, Gretel discovers that her father's compass is broken. They finally arrive at the home of the Blind Witch. The Queen tells them the Blind Witch has something she needs to defeat a powerful enemy, and the children need to get the item for them. The protective spells don't work on children, and the Queen tells them to go in when the Blind Witch is asleep and get the item. The Queen assures them that she'll find their father if they succeed, and then warns them that no matter how they're tempted, they can't eat anything they find. She then shows them the house... which is made of candy and gingerbread.
Henry visits Emma at her office and explains that Ava and Nicholas are Hansel and Gretel. According to the book, their father abandoned them. Henry is sure that the father is there because no one comes to or leaves Storybrooke. When Emma notes that she came there, Henry explains that she's special. He then asks about his biological father. Emma reluctantly explains that she was young and had just got out of the foster system, and found a job at a diner. Henry's father was training to be a fireman and came in for meals every night. They didn't get married, but they hung around town a few times and life happened. His life got better and Emma's got worse, and she ended up in jail. Before Emma went to jail, she tried to contact Henry's father and found out that he died saving a family from a burning apartment building. She tells Henry that his father was the real hero, not her. Henry asks if Emma has anything of his and Emma realizes that she doesn't. She gets an idea and realizes how she can find the children's father.
Back at the apartment, Emma shows Ava and Nicholas her baby blanket. It's the only thing that she has from her parents, and asks if there is anything from their father that they've held onto. Ava says that she does, but makes Emma promises to keep them together if she gives it over. Emma agrees and Ava gives her an antique compass that belonged to her mother. The girl then asks if Emma ever found her parents, and Emma admits that she didn't but that she'll find their father.
As the children approach the house, Hansel almost eats a piece of candy until his sister stops him. They go inside and discover that the house is filled with candy and cake. Gretel reminds her brother not to eat anything and they find the Witch sleeping. They spot the satchel with the item and Gretel goes to get it. Meanwhile, Hansel takes a cupcake and eats it. The Witch wakes up immediately and they realize that her fireplace is filled with human bones. The doors and windows close, sealing them in, and the Witch says that she smells dinner.
Emma goes to see Mr. Gold at his shop and asks him about the compass. He admits that it's a very unusual piece and belonged to someone with great taste. Gold admits that he sold it and checks his records, but asks for her forgiveness before he hands it over. The best she'll give him is tolerance and Gold tells her that a Mr. Michael Tillman sold it. Emma leaves to investigate, while Gold contemplates the records... which are blank.
Emma finds Tillman working at a garage. He saw that he only met the children's mother once and that he doesn't have twins. Emma tells him that he has two children who have been living in an abandoned house, and he needs to take responsibility for them. Tillman says that he can barely manage the garage and that there's no proof, and Emma shows him the compass. She says that she can understand facing unknown children but tells Tillman that he brought the children into the world. If he doesn't help them now, they will eventually find him and then he'll have to answer to them. Tillman considers what she's saying and then says that he knows nothing about being a dad and he can't give them a good home.
Next, Emma calls Mary Margaret out of the apartment and tells her that she can't tell the children the truth. Mary Margaret thinks she should and notes that Emma told Henry the truth. However, Emma admits that she lied to Henry about his father being a hero. Regina arrives to remind Emma that the children need to be in Boston by that night.
The Witch locks the children up in a cage and starts the fire. Gretel tells Hansel not to struggle, grab the key, and toss it to Gretel. The Witch returns and takes Gretel out, and Hansel manages to grab the key and free himself. He grabs a stick and tries to hit her, but the Witch knocks the weapon aside and advances on him. The children manage to grab her, throw her into the oven, lock her in, and escape with the satchel.
At her castle, the Queen watches and casts a spell, starting the oven. She then has the children brought to her and demands the satchel. Gretel hands over the satchel and removes a shining red apple. The Queen congratulates Gretel, saying that she reminds her of herself at her age, and tells them the apple is a weapon for a particular and devious enemy who believes that she's safe. Gretel asks her to keep her promise and the Queen tells them they deserve better than a father who abandoned them. When Gretel says the Woodcutter is all they have, the Queen says that they've impressed her and she wants them to live with her. If they live with her they can live with royalty, but Gretel refuses and asks for their father, insisting that he would never abandon them. She tells the Queen she would never live with someone as terrible her, and that they will prove her wrong. The Queen casts a spell, surrounding them in a vortex of smoke.
That night, Emma puts the children into her car and gives Ava her compass back. Regina and Henry watch and Henry runs to Emma and says that they can't leave Storybrooke. When he says that something bad will happen, Emma says that it already has. She drives off and approaches the town border, and her engine stops. Emma takes out her phone and calls for help.
The Queen watches her magic mirror as Snow meets with the dwarves. She then has the Woodcutter brought in from her dungeons. The Queen tells him that his children are gone and that they believe he has abandoned her. She then asks the Woodcutter why the children were so loyal to him, and he tells her that they're a family, and family always finds one another. She then releases him and tells him he can be with his children once they find each other.
Hansel and Gretel wake up in the woods, surprised that the Queen released them. Gretel looks at her compass and they go off into the woods together.
As they wait, Ava notices that her compass needle is moving. Tillman arrives in his tow truck and realizes that the children are his. He asks Emma if her car really broke down and she says that she wanted him to see the children at least once. She explains that she gave up Henry so he would have a better life, but once she saw him she couldn't leave. Tillman asks if she's taking them to Boston and Emma says that she doesn't have to. He thinks for a moment and then agrees with her, and then goes to his children.
Back at her apartment, Emma tells Mary Margaret that the children's father changed his mind and showed up, and admits that he had a little nudge. She wonders what it would be like to discover one's father and Mary Margaret tells her not to give up. Emma wonders if she should let go because her parents have made it too hard for her to find them. She tells Mary Margaret Henry's theory that Mary Margaret is her mother. Mary Margaret thinks she would remember if she had a child and jokingly notes that Emma has her chin. Emma goes out to get some air and Mary Margaret notices the baby blanket. Once her roommate is gone, Mary Margaret examines the blanket for a moment and puts it away.
Outside in her car, Emma is reading articles about how she was found when Henry comes by to see her. Emma starts to tell him the truth about his father but can't bring herself to do it. He thanks her for telling him, and then points out that she's really changing things. At that moment, a stranger arrives in town on a motorcycle and parks across the street. He approaches Emma and asks if he's in Storybrooke. When she says that it is, he says that he's staying and Henry is surprised that someone new has come to town. The stranger refuses to give his name and goes to find a room.