Evelyn Marsh and Malcolm are questioned by local authorities about her husband's accident. Of course, James is brought up with Malcolm acting like he barely knew him. Evelyn gives them his full name and tells them he is from Twin Peaks. He was hired to repair her husband's Jaguar. It broke down near Wallie's she went in to use the telephone, where she met James and he offered to help. The officer leaves, saying that they'll check out Wallie's. Malcolm walks over to Evelyn and comments that they successfully connected her to James. Evelyn seems a bit unsure about what they've done. Malcolm gives her a forceful kiss and says "Careful, Evelyn. I'm not sure if I can tolerate a nervous co-conspirator."
Meanwhile at Wallie's: Donna thinks they need someone to help them get out of this predicament. James tells her that Malcolm killed Mr. Marsh and he's being framed. Donna suggests they call Ed, but James insists his only chance is to talk to Evelyn. She told him it was all a set-up and maybe she'll tell the police that too. Donna says that is too dangerous because the police would be waiting for him. When James seems adamant about talking to Evelyn, Donna realizes there is something James isn't telling her and walks off to call Ed.
Harry and Cooper talk to Bobby and Shelley: Harry asks Bobby what he was doing at Shelley's house to which Bobby replies, "Shelley almost gets murdered and you're worried about what I'm doing. What about Leostein?" Bobby goes on to tell them that he and Shelley are together and have been before Laura died, before and after Leo went into his "drool mode." Cooper asks Bobby where he was the night the mill burned. Bobby seems puzzled by the question. Cooper continues by saying Leo tried to kill Bobby and he shot Leo. Bobby says no way. Leo was about to chop him up with an ax when Hank Jennings shot Leo through the window. Harry asks them what Leo's connection with Hank is, but neither of them seem to know. Shelley also has no idea where Leo might be. Harry assures her they're not going to let her out of their sights and will assign a couple deputies to watch her house.
On their way out, Albert enters the conference room saying to Bobby, "Get a life, punk!". Harry and Albert share a hearty hug of greetings. Albert tells them his invite back to Twin Peaks is Windom Earle. He pulls out a United States map and spreads it out over the conference room table. "Earle has sent gift-wrapped packages to police departments and major law enforcement agencies. Each looks like a mail bomb but they turn out to be harmless. The packages were sent to the cities of Springfield, Kansas City, Laughton, Dallas and Jackson forming a "C" on the map for Caroline. Inside the packages are articles of clothing also belonging to Caroline: white veil, garter, white slippers, pearl necklace and a wedding dress. "He's got DEA and FBI, not to mention Mississipi, Oklahoma and Illinois state patrols looking for him. Everyone's invited to the party, but guess is he won;t dance with anyone but you Coop." Cooper walks over to the window and looks out in quiet reflection. Albert walks over and joins him and says, "He's making his move, most definietly....Oh, Coop about the uniform (talking about Cooper's flannel and slacks ensemble) replacing quiet elegance of the dark suit and tie with the casual indifference of these muted earth tones is a form of fashion suicide, but call me crazy, on you it works."
At Windom Earle's cabin in the woods: Windom plays his Japenese wooden flute as Leo awakes from his slumber.
Earle: I trust you slept well. While you slept, I've learned all about you. Leo Johnson, the police would like to see you as soon as possible. Now let me see, Drug trafficking, arson, attempted murder...domestic violence, now I am partial to that."
Leo gets up and tries to flee, but Earle hits him in his wounded leg with the flute and pins Leo to the ground. "Well, Leo, I cleansed your wounds. You're on the mend; I've removed the proverbial thorn from your paw...Now, I want you to help me and obey me, will you do that?" Earle puts a metal band around Leo's neck saying, "I wanted to save this necklace for an occasion, but you've earned it. Now, come over here, I've made you some gruel." Earle presses a button on a small device, which delivers an electrical shock to the metal band around Leo's necks. After this test run, he feeds Leo some gruel, purring in his ear.
Ed and Norma lie in bed at Ed's house looking back on the last 20 years and all the plans they made that fell through. All the pain and regret they've endured when they were married to other people instead of being together like they should have always been. Nadine comes in and Norma starts to rise from the bed, but Ed says that he might as well talk to her now. Nadine is upset because she was disqualified at the district wrestling finals because the airplane slam is illegal. She apologizes to Norma for hospitalizing Hank, but when she thought he was going to hurt Ed, she "sorta got mad." Nadine gets up to leave and says she knows about the two of them. Now, she doesn't have to feel guilty about her and Mike. She doesn't go into details, but says that it's really serious and she's cool with the current situation.
Cooper and Harry talk to Josie:
Harry: Josie, this is it. The Seattle police want answers and I have to tell them something. They know you were connected to Jonathon.
Josie: How did he die?
Cooper: He was shot three times in the back of the head.
Harry: If you were ever going to tell the truth, now would be an ideal time.
Josie reaches for Harry's hand and Cooper notices it, leaving them to give Harry a moment alone with her. As Cooper goes to get a refill of his coffee, Pete enters carrying a large bundle of dry cleaning. Cooper asks who the clothing belongs to and Pete answers, "Catherine has been running her into the ground, so I offered to stop by the dry cleaners and pick up Josie's stuff." The phone rings and Pete asks Cooper to give him a hand while he answers the phone. While Pete does this, Cooper plucks some fibers from one of Josie's coats and takes a pair of leather gloves as well. The phone call is Thomas Eckhart looking for Josie. "Josie, it's Thomas. I'm so glad I found you. I was wondering if we could get together. Did you hear what happened to Jonathon? Dreadful." Catherine comes on the line. welcoming Eckhart to Twin Peaks in a sinister tone of voice. Eckhart hangs up and expresses to his assitant his disappointment in Josie for running back to Catherine Martell.
In Ben's office at the Great Northern, Ben continues his delusions of being Robert E. Lee leading the Confederates to victory in the Civil War under Dr. Jacoby's supervision.
Audrey: What do you think, Dr. Jacoby?
Dr. Jacoby: Letting out to mingle with the public doesn't seem to help.
Jerry: Now, you have to admit, He's kind of fun this way.
Audrey: What's the matter with you. That's my father, your brother. We can't leave him like this.
Jerry: Oh, Audrey honey. Now there's some advantages to leaving him insane. (they walk into the hall) Now, Audrey. You know I was upset too but there's some projects both domestic and international that I'd like a chance to develop. I mean, one man's crisis is another man's opportunity.
Audrey: Let me tell you something, Jerry. We leave him the way he is and I become executor of the estate.
Jerry: Audrey, it's a little more complicated than that.
Audrey: No it isn't. I've examined his will, Jerry. If my father becomes incapacitated it all goes to me when I'm old enough and I am old enough and he is incapacitated. It's pie my way either way...or the only projects you be developing is selling baseboard heaters at the local Cash and Carry
Jerry: What's happened to the man is a tragedy.
Audrey: It is a tragedy, Jer. (she returns to the office and tells Jacoby) I want you to bring my father back.
Jacoby: To the office?
Audrey: To the real world.
Jacoby: I think it's time we implement the Appromatox scenario.
Evelyn is at Wallie's getting trashed. Donna confronts her about James.
Donna: Why are you doing this to James
Evelyn: Why not?
Donna: Because he's a good person.
Evelyn: He was good at two things, the car and me.
Donna: You don't get it do you? I'm talking about our lives.
Evelyn: Life. Life will be rosy if you can just get out of one silly little jam. Maybe...maybe not.
Malcolm comes in and tells Evelyn to get in the car that's waiting outside. Then, he gives some parting words to Donna.
" I'm sorry about your firend, honey. There's nothing you can do. Why don't travel off to your little town safe in the knowledge that if I ever see you here again, I'll kill you."
Albert talks to Cooper about the clothes of Josie's he took from the Blue Pine Lodge, showing slides of the evidence:
Albert: Coop, take a look at this. Vicuna thread samples taken from Josie's coat...ones found on the floor outside your room.
Cooper: They from the same coat?
Albert:...Either Josie Packard pulled the trigger or she's loaning her winter wear to the wrong kind of people, it's a perfect match.
Cooper: What about the gloves?
Albert: Still checking for powder burns. We'll have the results in the morning.
Cooper: And the Seattle homicide?
Albert: Locals are looking for a beautiful Asian woman, late 20s in connection with the murder of one Jonathon Kumagai. Mr. Kumagai has an Interpol sheet as long as your arm and three holes in the back of his head. I'm betting the the bullets will match the slugs we took from your vest.
Cooper: I hope it's not Josie, for Harry's sake...Albert, not one word until we're certain.
Cooper goes into Harry's office:
Harry tells Cooper the name of the victim found in his office is named Eric Powell, Powell was Caroline's maiden name, Cooper says, then adds that's why Earle chose Eric. Every move Earle makes sends a message because he has not forgotten what happened between him and Cooper in Pittsburgh.
Harry: So, whenever he takes a piece from the board?
Cooper: Someone dies...I never beat him, Harry.
Harry: Coop, if you've got the need for a chess expert, we have one of the best right here in town.
Scene switches to the Double R where Pete Martell beats three opponents - Toad, Coop and Doc Hayward - simultaneously.
Cooper: Pete, I need your help. I'm playing a chess match of considerable importance. Can't say more than that...I'd like to stalemate the game losing as few pieces as possible, none, if that can be arranged.
Pete: Well, Agent Cooper. I'd be proud to serve.
Behind the counter, Shelley arrives to talk to Norma. Norma is very concerned about Shelley everthing that had happened with Leo. She wanted to come see her but she's been very busy at the diner with Hank in jail. Shelley asks if she can have her job back. Norma is overjoyed and tells her of course and that it hans't been the same without her. Shelley says she'll feel safer if could spend more time at the dine and that she can start right away.
Harry interrupts to talk to Norma privately - they step into the kitchen. Harry says Hank is nearly ready to leave the hospital. Norma asserts that she doesn't want him coming back this time. Hrry assures her by saying he won't coming back; they're charging him with the attempted murder of Leo Johnson, add that to the parole violation equals Hank going away for a long time.
Thomas Eckhart arrives at Blue Pine Lodge at Catherine's request, an invitation to dinner. Eckhart was surpised by the invitation considering all that happened between Eckhart and Andrew Packard. Catherine says it was only fitting that she dine with her late husband's business rival. Eckhart reminds her they were friends and partners at one time. Catherine agrees to this and then asks why he had her brother killed. He replies "one could find reason to kill for love.", hinting Josie was the reason. All this time, Josie is serving them their wine, appetizer and main course dressed in her maid's uniform and terrified at being so close to Eckhart, the man she had tried so desperately to get away from.
Catherine: I wonder what we shall do about her, it would be a shame if you left empty-handed.
Eckhart: How can I place a value on something so precious?
Catherine: But you will try, won't you?
James goes to see Evelyn and find out why she framed him. Evelyn says it's not safe for him here, fearing Macolm would bring more danger than the police. James says "You better tell me a story, Evelyn. I'm all mixed up inside and I just want to know why you would do this to me." He throws her on the couch and looms over her waiting to find something good in her. Evelyn tells him she did everything, she lured him in and brought him here while Malcolm planned the frame. She did it for the money, out of fear and because she wanted to do it. Malcolm sneaks up behind them and hits James on the head with a gun, knocking him unconscious. Evelyn tries to help him but Malcolm doesn't allow it and begins to tell Evelyn the new plan. "He broke in the house. He was angry. He was crazy. He killed Jeffrey and he came back to kill you. Poor defenseless little widow. But you we're ready for him, Evelyn. You got your gun and you shot James, you shot him until he was dead."
Back in Ben's office: Audrey and Jerry pose as father and daughter, dressed in southern period clothes, who are hosting Generals Grant and Lee to sign the peace treaty. Dr. Jacoby plays General Grant, telling Ben what a valiant and worthy opponent he has been and an officer of fine character to help bring Ben's confidence back and shatter his Civil War delusions. Ben digresses, but eventually signs the treaty and shakes Jacoby's hand. After doing so, Ben nearly passes out and starts writhing on the floor. Jacoby says to give him some room to breathe. Ben says he just "had the strangest dream" where he was Robert E. Lee and he won in spite of incredible odds and adds that all of them (Bobby is present too dressed as a confederate soldier) were there. Audrey smiles and says "Now, you're home, Daddy." Jacoby asks if there any side effects like dizziness. Ben exclaims that he feels terrific then gets a puzzled look and asks them why they are dressed in those ridculous clothes.
Windom Earle is getting into a disguise while Leo writes something for him. When Windom checks Leo's progress he is extremely disappointed. "No, no, no, terrible...erase....erase....(gives Leo an electric shock)...Now, try again...concentrate...Leo, for heaven's sake. (another shock). Let me show you, like this...There you go, much better...I am proud of you, Leo." He gives Leo a bite of a cookie as reward. Windom points to a group of photos - Shelley, Audrey & Donna - "Pretty words for pretty girls, which one shall be my queen." He tears the paper into thirds and puts one of these pieces in an envelope and asks Leo to seal with a good, healthy lick.
Meanwhile at the Marsh's:
Malcolm plans to on how to set it up to look like Evelyn shot James. He'll do the shooting but needs Evelyn's fingerprints on the gun. Evelyn is holding the gun and knows she can't go through with it, can't let James be killed. Donna interrupts them and Malcolm grabs her as she kneels by James' unconscious body begging them not to kill him. When Malcolm realizes that Evelyn won't go through with it he comes at her and Evelyn shoots Malcolm, she shoots him until he is dead.
At the Great Northern, Cooper waits to board an elevator, preparing to return to his room. He pulls out his wallet and looks lovingly at a picture of Caroline. He doesn't notice Windom Earle getting off the elevator in costume. After Cooper boards, Earle walks up to the front desk and gives the concierge the enevelope Leo sealed for him earlier and says "For Miss Audrey Horne, please." In Cooper's room, Cooper sees a white porcelain mask on the pillow in the shape of Caroline's face. When he lifts the mask, an audiotape begins playing; it's Earle's voice. "Breathtaking wasn't she? A truly beautiful woman, Caroline. Funny, isn't it? After all this time, after all that happened in Pittsburgh, I still love her and I know that you do too. Now, Dale, listen carefully. It's your move."