Neal is struggling as he carries a large cardboard box down the street, Peter strolling casually at his side. Neal complains about the weight of the box, but Peter tells him that he probably doesn't complain when he's lugging laser cutters and borescopes are. Neal counters that "When cracking safes, I have a sense of purpose." At a look from Peter, he corrects himself. "Had – had a sense of purpose." Peter says brightly, "Well, now you have a new purpose! Carting these Rolex knock-offs to evidence!"
As Peter and Neal enter the office, Sara is standing at Neal's desk – she has made a discovery. Peter goes to assemble the team as Sara asks to speak to Neal alone. As Peter leaves, Neal looks at her expectantly, but all she says is, "You look well." Relieved, he tells her that she does, too, and compliments her hairdo as they walk towards the employ conference room. Sara confronts him about their steamy kiss in the archives, leaving Neal to stutter, "Well, it was . . ." "Hot. It was hot!" finishes Sara with a smile. Neal deliberately misunderstands her. "Yeah, it was hot – back in the stacks, no A/C – it was like being back in college." "You never went to college," Sara reminds him, but he assures her that he did a lot of research. Peter, Jones and Diana are watching Sara and Neal studying a document with their heads close together, and speculatively, Diana inquires, "When did that happen?"
In the team meeting, Peter tells the team they have a chance to take down Vincent Adler, and describes Adler's billion-dollar Ponzi scheme. Sara has determined that Adler is looking for a sunken German U-boat off the coast of New York. They don't know why, but they can use the fact that he is looking for it to track him down. As the meeting breaks up, Peter asks Jones and Diana to search for another lead – Alex Hunter. Jones and Diana roll their eyes and mutter, "Yeah, we already know Alex," they say, with a meaningful look at Neal. Sara picks up on the not-so-subtle byplay, and when they are alone, she teases Neal. He admits that "calling her an acquaintance might have been an understatement," but Sarah assures him that he owes her no explanations – she, too, has lived a life, but if there is anything between them, to please not lie to her. "I would never lie to you," declares Neal, smiling. "Yes, you would," says an unsmiling Sara. "So – Alex." "Over – a long time ago," Neal assures her. They arrange to meet the next day at one o'clock for lunch at his place.
At Neal's apartment, Mozzie is fiddling with the fractal antenna attached to a computer. Peter, Neal and Mozzie speculate as to what might be on the U-boat – Mozzie suggests plutonium, or Hitler clones. As Mozzie waits for the antenna to warm up, Peter notices an Art Deco- painting of the Chrysler Building that Neal has painted in electric blues and oranges, "to keep up my technique." Mozzie tells them that the antenna will only work if they are very close to the U-boat, because the SOS signal from the boat would be week after 50 years. Peter thinks that Alex may have a better idea exactly where the boat is, but Neal has been unable to reach her. Calling her again, he's shocked when Adler answers Alex's phone. He tells Neal that he has Alex and to "call off his dogs." Neal him that he can't do that, and Adler replies, "Neither can I," and hangs up.
At the office, Diana theorizes that Alex is working with Adler, but Neal disagrees. Peter cautions them that they can't make any assumptions, but feels that if they find Alex, they'll find Adler. Neal has Mozzie ask around, and discover that Alex was in town two weeks previously trying to pawn off silver through Ted Eames. Neal is surprised – Eames is pretty small-time. Neal comes up with a scheme to approach Eames with the fake Rolexes. The next day, Mozzie and Neal approach Eames with the watches, but are "surprised" by a police raid. Using some sleight of hand, Eames and Neal trade the fake Rolex back and forth, appearing to keep Eames clean of stolen goods. Winning Eames' confidence, Eames tells Neal that the last time he saw Alex, she was heading to the conservatory gardens.
The security cameras at the gardens show Alex going in, but not coming out, although the side gates have no cameras. Peter and Neal separate and begin to search the garden for clues. Peter loses Neal, but when his cell rings, it's Adler. Warily, Peter pulls out his gun, but Adler tells him to "holster your gun and get in the car." A dark limo is on the curb – the door swings open, and Neal is inside, with a trapped look on his face. Peter enters the car, and is confronted by one of Adler's men. Adler is in the front seat, and greets them. He forces Peter to unlock Neal's anklet, and then makes them drink a glass of tea with knock-out drops mixed in. They pass out.
Neal wakes up muzzily to Alex's concerned face. As he regains consciousness, Adler enters and, opening the windows, they see a U-boat in a warehouse – Adler has found it. As they walk out to examine it, Adler explains that it was scuttled near the end of the war. It turns out that one of the crewmen on the boat was his father. He needs Neal because, when the boat was scuttled, it was armed with explosives in case anyone came along later and tried to enter it. Neal asks Adler what he will do if he refuses, but Adler taunts him: Neal may tell himself he'd doing it to protect Peter and Alex, but Adler knows that Neal is just as curious as he is to see what is on the boat.
The hatch has been cleverly rigged with an old Enigma machine attached to dynamite. Peter and Neal struggle to defuse it, but accidently trip the timer, starting it off. They can't possibly guess the correct Enigma combination, but Alex suggests using "MIDAS", a word suggested by a story that her grandfather use to tell about a king who had a golden touch. Her grandfather was also the radio operator who received the U-boat's final SOS signal. Neal types it in, and it disarms the bomb.
Meanwhile, Sara arrives at Neal's apartment for lunch and is surprised to find only Mozzie. After exchanging some friendly banter, they realize that Neal is uncharacteristically late. Alarmed, they contact the FBI. Diana checks Neal's anklet, only to find that Peter's key removed it at the conservatory garden. She tells Sara that they will stop by and pick up Sara and Mozzie to begin searching for Peter and Neal.
Open the hatch, Neal and Peter carefully climb into the U-boat, and discover a fabulous treasure trove of art and antiquities that had been collected by the Nazis during World War II. Neal declares that it is worth billions of dollars. "It has to be the greatest collection of art that has ever been found!" he says in delight. Poking around, they discover the SOS transmitter that Mozzie can use to find them. Neal secrets it. Adler joins them, and now that Neal has served his purpose, he, Peter and Alex are no longer needed. Adler and his assistants lead them away and they are drugged again.
Diana and Jones have picked up Mozzie and Sara in a panel truck, and Mozzie's computer antenna suddenly picks up the U-boat's signal. Curiously, it is moving. Mozzie gives directions toward the source of the signal.
Neal, Peter and Alex regain consciousness. They are tied with plastic ties and chained to cement blocks at the bottom of a strange pit. Neal realizes that it is an empty ship dry dock. However, Adler's men are turning on the water, and the dry dock begins to fill with water. Frantically, they look for a way to escape. Luckily, Alex has a blade hidden in her bra. Neal uses his teeth to extract it, and moments later, they are free. As they climb out of the dry dock, Adler's men spot them and begin shooting. Luckily, Jones and Diana arrive at just that time, and capture them. Neal turns to Alex, thanks her and gives her a lingering kiss. Looking up, he sees Sara staring at him, wide-eyed, standing beside an uncomfortable-looking Mozzie. Sara turns away.
Back at the office, they are going over what they know in the conference room – it is assumed by now that Adler knows that they have escaped. Alex volunteers the information that Adler was planning to ship the treasure back to Europe at the end of the week, so Peter decides that since they have a bit of time, he and Neal should go home and get some rest. Alex describes the building they were held in, and Peter tells the team to concentrate on looking for that type of building, with a buoy nearby.
As Neal is wrapping things up, Sara approaches Alex and begins chatting. Jones alerts Neal to the fact that his ex and his current at now talking, and offers to be his "wing man", which Neal turns down. Neal "casually" wanders over to the girls. Sara wanders away, and Alex tells Neal the story of the sub, and how her grandfather had encoded the signal of the SOS into the music box; however, after Germany lost the war, he fled to the U.S. and the music box was lost. On his deathbed, he gave Alex the key to the music box and implored her to find it. Alex tells Neal that he reminds her of the treasure: "some wonderful fantasy that's just out of reach." She leaves him with a kiss on the cheek and an admonition to "take care of yourself." Neal finds Sara and begins to apologize, but is interrupted by Peter, who insists that Neal and Sara come for dinner at his house.
At Peter's house, Sara and Neal are uncomfortably silent, in stark contrast to Peter and Elizabeth's playfulness. After dinner, as Peter and Neal are talking quietly, Elizabeth chats with Sara, and admits that while she does worry about Peter, "I knew who he was when I fell in love with him." "You never tried to change that?" inquires Sara, and Elizabeth is surprised. "No – why would I?" and assures Sara that "for better or worse" has actually turned out for the better. "Do you trust Neal?" Sara asks Elizabeth. "Neal is a lot of things," muses Elizabeth, "but when it counts – you can trust him." Peter and Neal see Elizabeth and Sara deep in conversation, and when Neal wonders what they are talking about, Peter assures him that they are talking about Neal. "Me?" says Neal in surprise. "Boy, do you have a lot to learn about women," declares Peter, and goes on to tell Neal that he feels like the luckiest guy. "That's not who I am," says Neal. "You just have to figure it out," Peter assures him. "And when you do, you'll be the luckiest guy." Later, Sara accepts Neal's apology, and reminds him that he owes her lunch.
The next day, the FBI team begins to scour the docks looking for the warehouse. Neal hears a buoy and follows it, finding a warehouse close by. As he tries to enter, he is confronted by Adler, who tells him that the art is on an 18-wheeler ready to be moved. Adler offers Neal a deal – if he gets Adler past the FBI's perimeter, Neal can have half of the treasure. "Wow – that sounds like a really good deal," says Neal, "You must think I'm an idiot." "No, I think you're an opportunist," corrects Adler. "You took everything from me," declares Neal. "Only after you tried to do the same to me!" Adler reminds him. Neal demands to know why Kate had to die. Adler tells him that the explosives on the plane were Kate's idea – he and Kate parachute out over the ocean, the plane explodes, and everyone would live happily ever after. But then she called Adler and told him that Peter had arrived and threatened to ruin everything. "So you blew up the plane early," realizes Neal. "If I had waited another thirty seconds, I would have blown you up, too," grouses Adler. "Am I supposed to be grateful?" Neal asks, and Adler tells him that Neal was the closest thing to a son he ever had. "No. I'm nothing like you," Neal assures him. Adler sneers, "There's nothing sadder than a con man conning himself," and encourages Neal to join him. Neal tells him to go to hell, and at that moment, there's an explosion from the warehouse. Neal runs up to the warehouse. "Tell me you got the TNT out!" he yells at Adler. They pry open the door, in the face of another large explosion.
Meanwhile, the explosion has caught the attention of the rest of the team, who come running up. Neal and Adler are lying on the ground, stunned. Neal recovers first, and stares at the carnage. Adler, enraged, aims his gun at Neal, accusing him of arranging for the explosion. Neal vehemently denies it, but Adler declares, "You won't get away with this." A shot rings out, and Adler falls – Peter has shot him. Neal, staring at Adler, is stunned. "He was going to kill me," he says woodenly, and Peter, wrung out, asks him, "What did he mean, 'you won't get away with this?'" "I don't know," says Neal. Diana and Jones gently lead Neal away from the fire. As Peter begins to follow, a burning fragment of a painting falls to the ground in front of him. As it catches his eye, he is startled to realize that he has seen that fragment before – it's part of the painting of the Chrysler Building Neal was painting. "Dammit, Neal!" he exclaims to himself, and runs after them. Pulling Neal aside, he accuses Neal of starting the fire. Neal earnestly assures him, "Those were masterpieces, I would never have burned them, you know that." Peter doesn't believe him. "No, but you'd steal them!" "I don't know what you're talking about," declares Neal as he turns to walk away. But Peter is convinced that Neal has somehow finished the con on Adler. "I'm not lying to you now, Peter. I didn't steal the art," repeats Neal, but Peter accuses him: "I think you did." Exasperated, Neal turns away, but before he does, he tells Peter, "Then prove it."
Neal walks into his apartment, and sees a key on top of a small envelope. The card inside the envelope is typed and reads. "77850 Ganesvoort St, Unit A, New York, NY. YOU'LL THANK ME." Curiosity piqued, we see Neal entering a large warehouse-style building. Carefully peering in, he enters, and then finds himself surrounded – by the treasure from the U-boat. Standing in the middle of the treasure, he is still for a moment before a smile breaks across his face.