I've heard some DS9 fans say the show didn't really get good until after the Dominion arc started, but I don't think that's true. In fact, starting with "Blood Oath", the show was on a roll that would run right through the remainder of season 2. (Compare it to the weak stretch that TNG suffered from around the same time. Night and day.)
Even more than part 1, Marc Alaimo's Dukat dominates the proceedings. We get plenty of fireworks between him and Sisko, but also the first budding of the rich "relationship" he would have with Kira. There's some serpentine Cardassian politics thrown into the mix. Sisko's "easy to be a saint in paradise" speech is superb, though Avery Brooks lapses a little into the overacting that bugged me on occasion.
The only drawbacks, really, are some slow parts when actual Maquis characters appear onscreen; Quark's flirtations with the Vulcan rebel are just not that interesting.
In what was already a DS9 trademark, the episode ends with no easy answers.