At the sheriff's station in the aftermath of the pageant, Lucy and Andy declare their love for each other after she choses him to be the father of her baby. When Andy tells Cooper that the cave petroglyphs are actually a map to the Black Lodge, Pete comes in reporting that a person looking like the Log Lady stole his truck. Then the real Log Lady enters with the oil used for the Black Lodge gateway and a fully recovered Ronnette Pulaski explains that the oil is the same burning stench she remembers the night Laura was murdered.
In the nearby woods, Windom Earle drags Annie through the woods into Glastonbury Grove forest clearing, and into a circle of eight sycamore trees and through the red curtained gateway into the Black Lodge.
At the Hurley house, Nadine wakes up from the bump on the head and now reveals that she is her old self again. Mike declares his love for Nadine, but since she has no memory of the last month, she confronts Ed and Norma after seeing them together and becomes very upset.
At the Hayward house, Donna is still trying to control herself after Benjamin's news that he's her biological father, and Dr. Hayward angrily knocks Benjamin into the fireplace mantle for interfering with his family.
Meanwhile, Cooper and Truman drive to the Ghostwood forest where Cooper tells Truman that he must go on alone to rescue Annie. Truman watches with amazement as Cooper enters the Glastonbury Grove alone, walks into the circle of sycamore trees, through the red curtains, where Cooper suddenly finds himself in the red curtained room from his first Laura Palmer dream.
Ten hours later. While Truman and Andy wait and wait in the Glastonbury clearing for Cooper to return, Audrey arrives at the Twin Peaks Savings and Loan where she chains herself to the bank vault to protest their support of Catherine's plans for Ghostwood. Before the elderly and senile bank president, Dell Mibbler, can call the sheriff or the press or even understand what is going on, Andrew and Pete arrive with the key to open Eckhardt's safety deposit box hoping to find something valuable. But inside the box they find a sensor activated bomb with a taunting note saying: "Got you Andrew. Love Thomas." Seconds later, there is a huge explosion.
At the RR Diner, Bobby asks Shelly to marry him and she willingly accepts, while his parents are nearby enjoying being back together. Then Sarah Palmer arrives with Dr. Jacoby in which she speaks to Major Briggs in Windom Earle's voice saying: "I'm in the Black Lodge with Dale Cooper. I'm waiting for you."
Meanwhile, Cooper sits in the red curtained waiting room of the Black Lodge when the backwards-talking dwarf from another place speaks to him and introduces him to the elderly room service waiter who has recently died, the giant, and Laura Palmer. Cooper then walks into the many red curtained rooms of the Black Lodge and encounters evil doppelgangers (shadow selves) of Laura, Maddie, Caroline, Annie and Leland Palmer. Cooper runs into Windom Earle who tries to strike a bargain for Cooper's soul. Then Bob appears and strikes Earle down saying that Earle does not have the authority to ask for Cooper's soul, so Bob destroys Earle's. Cooper runs into more of the maze-like red curtained rooms of the Lodge, fleeing from his own evil doppelganger who finally catches up to him.
That night, Truman finds Cooper and a bloodied Annie lying on the ground and unconscious by the circle of oil as the red curtained gateway to the Black Lodge disappears.
A little later, Cooper awakens in his room at the Great Northern Hotel with Truman and Dr. Hayward attending to him. Cooper asks about Annie, and Truman replies that she's in the hospital and will be all right. When Cooper goes to the bathroom to brush his teeth, Killer Bob's reflection is seen in the mirror. Cooper (actually his evil doppelganger) rams his head into the mirror and beings cackling:
"How's Annie! How's Annie! How's Annie!..."