Finch receives the number for Michael Cahill, a single 33-year-old man with no attachments of any kind. Cahill is a medvac pilot delivering a patient who needs a heart transplant to the hospital. He lands 16 blocks from the hospital and insists on delivering the patient in person. However, as Finch has learned, Cahill is actually smuggling anything and everything in via the stretchers of his patients. The man in charge of the smuggling ring is Neil Vargas, and they kill anyone who gets in their way.
Reese has also infiltrated the gang as their ambulance driver. As he takes Cahill, Vargas, and the other man, Ajax, to the hospital, a patrolman pulls them over. Reese offers to take care of it but Cahill goes to talk to them while Ajax worries that the police will catch on. Vargas assures him that Cahill hates cops and will kill the patrolman if he has to. He also assures the others that he has contacts in the police, "HR." Cahill takes care of things and tells Ajax that he picked an ambulance with a broken taillight. Reese continues driving and they go to an alleyway to drop off the diamonds they smuggled in. Vargas takes the gang's cut and their clients drive off, and Ajax threatens to shoot them. Cahill beats him unconscious until Vargas stops him, and Cahill warns that he'll kill Ajax the next time he screws up. They set the ambulance on fire and leave.
The gang splits up and Reese follows Cahill. Cahill breaks into a home in Brooklyn and Finch confirms that the owner's name is Tulley, a police officer. Reese prepares to shoot Cahill… and sees him meet with his son and pregnant wife. Finch confirms that Cahill is actually Daniel Tulley, working undercover.
Reese is holed up in a safehouse with his partner, Stanton. They're holed up in an apartment and a visit from CIA agent Mark Snow. He's there to confirm they have their captive, a local man, who they have tied up in the bathroom. Snow assures them that the man is government and tried to sell U.S. software secrets to the Chinese. He tells them to dispose of the man if they have problems en route and suggests that Reese take some R&R. As Reese leaves, Snow warns him that if he gets caught, he's on his own. Reese goes out onto the streets of New York.
The next day, Reese continues to watch Tulley's house while Finch confirms that "Cahill" is Daniel Tulley, a 9-year-veteran who has disappeared from the police records. When Finch worries that someone has figured out that Tulley is a cop, Reese warns that they could put Tulley's life at risk if they play it wrong. Tulley's handler, Detective Byrne, meets with Tulley outside the house and complains that he broke cover to see his family. When Tulley says that he just wanted to see his family, Byrne suggests that they pull him out since they have enough on Vargas. However, the guy they want is L.O.S., and Tulley insists he'll be there in person for the next pickup. Byrne doesn't believe that L.O.S. doesn't even exist, but Tulley assures him that L.O.S. is connected. He tells Byrne to take care of his end of things, and warns the detective that Vargas has someone on the inside. Finch and Reese, listening in, figure that it's the same crooked cops who let Elias have a shot at Carter.
At the 8th Precinct, Agent Snow approaches Carter and explains that they found Reese's fingerprints at a veterinary clinic in Connecticut. However, he's sure that Reese isn't there, and warns that whoever Reese is working with is at risk. Snow tells Carter that Reese kill his old partner, Stanton. Once Snow leaves, Finch approaches Carter and assures her that Snow doesn't know him. He then tells Carter about Tulley and asks her to explain the undercover process. She tells him that the records are kept on hard copy only to prevent computer hacking. The files are kept in a safe controlled by IAB, and only the handlers have the combination to their people's safe. Finch figures they need to destroy Cahill's file and assures Carter that he has it covered.
Reese calls Fusco and tells him to check with some of his crooked buddies in Narcotics. Fusco warns that they don't trust him since he's been making good collars, but Reese tells him it's time to get dirty again.
That night, Reese meets with Vargas' gang and listens as he gets a call. It's from someone on the inside and Reese figures something has gone wrong. He sends a photo of Vargas' car to Finch as they go in to a restaurant. They meet with Mr. Su, their supplier Su wants to cut out Vargas and deal directly with L.O.S., and his men draw on Vargas and his people. They draw as well and then Vargas offers Su something extra. He shoots him in the head and the other gang members take out Su's men and grab the cocaine. Ajax is wounded and they get him out, and Reese drives them back to Vargas' warehouse base of operations. When Tulley wonders where L.O.S. is, Vargas says that they're stopping there temporarily. He then has everyone destroy their phones.
Byrne and his people are tracking Tulley when he's forced to destroy his phone. Finch also loses the signal on Reese.
Next, Vargas has all of the men toss their weapons in, and then informs them that one of them is a cop. He assures them that he'll find out in an hour or so.
Reese goes to a bar and sits down at a bar next to a salesman. The man, Peter, talks about how he and his wife just bought a house. It turns out that Reese and the man's wife are from the same hometown. Peter goes to make a call and Stanton comes in. She points out that Reese is talking to the man who is married his Jessica.
Ajax bleeds out but Vargas refuses to let them get him to a hospital until they found out who is the rat. Tulley offers him a drink and tries to get at his cell phone, but one of the other men protests. Reese suggests that they put a tourniquet on Ajax just to shut him up.
At the station, Carter gets word about the gunfight at Mr. Su's. Finch calls her and admits that he lost Reese. He gives her the license plate number and asks for her help.
Reese finishes applying the tourniquet and Tulley warns that he'll probably die. Reese agrees and walks away. Once he's alone with Ajax, Tulley takes his phone and calls Byrne and gives him the general location. He then deletes the call log and puts the phone in his pocket.
Fusco meets with one of his former partners, Simmons, and says that he plans to shake down Vargas. Simmons warns that he'll need to get permission once they confirm that Vargas isn't paying protection money, and tells him that he'll handle it. As he walks away, Finch calls to tell Fusco that there's going to be a shift change at 1 Police Plaza and it may be their only chance. Fusco reluctantly goes there and finch talks him through how to get into the IAB vault between shifts and retrieve Tulley's file before Vargas' contact does.
As Fusco hangs up, Carter arrives and they both lie about being there. Carter then calls Finch, who tells him that she has hits on the license plate on the South Brooklyn piers. She goes to look into it, and Finch hangs up and gets back to Fusco. Fusco bumps into the officer on watch as she leaves and scans her card with a secret scanner, and then goes inside. He blurs the camera with spray and uses a UV light to spot the fingerprints on the keypad to Tulley's safe. Fusco gets it open and shreds the file... just as IAB Officer Davidson comes in. He draws a gun on Fusco and takes him out to the car. Fusco explains that he was protecting Tulley, and Finch tells him to be careful since the cops are looking for Reese. Davidson gets a call from Vargas and tells him that someone destroyed the file. However, Davidson has confirmed that someone called from the warehouse. He tells Vargas he'll call back later and then punches Fusco unconscious.
At the warehouse, Vargas searches Ajax's jacket and realizes that his phone is gone. He demands that they turn it over and Reese accuses Tulley of taking it. They get into a brief struggle and Reese takes the phone so that he'll be caught with it rather than Tulley. Vargas calls and confirms that Reese has the phone, and then one of his men, Hollister, knocks Reese unconscious.
Once Reese wakes up, Vargas and Hollister start beating him and demands to know what he told the cops about L.O.S. When Reese tries to bluff it out, saying reinforcements are on the way, Vargas says that his inside man would have warned him. Tulley asks for some time alone with Reese to get him to talk and Vargas agrees. Once they're alone, Reese admits that he's been undercover and knows that Tulley wants to go home to his wife and son. He also knows that Tulley's brother OD'd, which is why he is dedicated to bring L.O.S. down. Reese warns him that his cover will be blown and he's risking everything to stay. Tulley asks him to get a message to his wife, Melinda, saying that he loves her. Reese says that he'll find a way to get him home, and that the exchange is at a scrapyard.
Vargas returns and says that Ajax is dead and they need to move out. He prepares to shoot Reese but Tulley asks for the opportunity. Vargas gives him the gun and Tulley shoots Reese in the chest.
Stanton wonders what Reese plans to do. She tells him that Jessica's new man will take better care of her than Reese ever could. Stanton warns him that no matter what he looks like, Reese isn't one of them. Peter comes back and Stanton pretends to be Reese's wife. Peter insists on bring Jessica over and goes to get her, and Stanton says that she understands. She explains that the first time she got back, she sat outside her family's home but realized that they wouldn't understand what she went through. When Peter brings Jessica over, they discover that Reese and Stanton have slipped away.
Vargas and the gang take the dead bodies of Reese and Ajax to the scrapyard and dump them in the trunk of a car. Tulley slips Reese a flashlight while supposedly removing his ID, and then the gang set the car on fire and leave. Reese recovers consciousness and finds the flashlight that Tulley left him. He uses it to get find the latch and get out just in time. Carter arrives and offers him a lift, and he explains that Tulley just grazed him. Finch calls on Carter's phone and Reese tells him that Tulley is meeting with L.O.s. at the scrapyard. As he and Carter go off to help him, Finch warns his partner that Vargas' informant has captured Fusco and they may not have time to save him and Tulley.
At the scrapyard, Vargas and the others meet with L.O.S.: a well-dressed businessman. He pays Vargas for the drugs and starts to leave, but Tulley grabs him, holds a gun to his head, and tells everyone to surrender. Vargas prepares to shoot Tulley, but Reese and Carter arrive and take down the bad guys. When L.O.S boasts that he'll be out in 14 hours and will come for Tulley, Reese knocks him out and tells Tulley that the man is CIA. He explains that since the CIA can't win the War on Drugs, they're using drugs to fund the War on Terror. If Tulley takes him in, the CIA will ruin him in, but Tulley refuses to back down.
Davidson takes Fusco out into the woods and tells him that at the end of the day, he's dirty and always will be. The IAB officer says that Reese has abandoned Fusco and he might as well give him up. Fusco is unimpressed and talks about when he knows he was going to die, he decided to try and do something good. Davidson shoves him down and prepares to shoot him in the back, but Reese arrives and kills him. He then destroys the phone that Davidson used to call Vargas, and tells Fusco that he needs him to stay dirty so he can get inside with the crooked cops in HR. When Fusco warns that he'll be on the security footage with Davidson, Reese explains that Fusco will need them to beat the murder one rap. He admits that Fusco has done good work, but he's more useful on the inside.
Sometime later, Reese and Finch are outside Tulley's home and watch as he takes his wife to the hospital to have their baby. Tulley tells Melinda that he loves her and they kiss. Meanwhile, Finch tells Reese that Snow has arranged for the release of L.O.S. and asks what Reese plans to do. Reese says that he plans to watch over Tulley for the time being.
At the station, Snow gets L.O.S. released. The drug dealer is surprised that they sent Snow, who says that the Company always takes care of their own. L.O.S. wants to take care of Tulley and Carter like he promised, but Snow says that he's always been impulsive and escorts him to a SUV. Snow's men grab L.O.S. and haul him away.
Fusco goes back out to the woods after calling Simmons for help. Simmons says that he belongs to HR now.