Contains spoilers for this episode and earlier episodes.
Cooper asks Truman and his deputies to test an unusual method for narrowing the murder inquiry. Standing in a clearing with a bottle and a supply of stones, he links his throws to names beginning with the letter mentioned in Laura's diary. The exercise singles out Leo Johnson and Dr Jacoby for closer attention. Albert Rosenfield arrives to examine Laura's body and immediately clashes with the local officers, bringing a much harsher manner than Cooper's. Outside the investigation, Bobby and Mike confront Leo over their unpaid drug debt. Leo's warning about his unfaithful wife frightens Bobby, who is secretly involved with Shelly.
Ben Horne welcomes his brother Jerry home and takes him to One Eyed Jacks, introducing the casino and brothel across the border. Audrey questions Donna about Laura's connection to her father, while Donna and James try to make sense of their growing feelings. Leland's grief turns into a frantic dance with Laura's photograph, which breaks and cuts his hands. That night, Cooper dreams of the one-armed man, who calls himself MIKE, and a threatening figure named BOB. In a red-curtained room, an older Cooper sits with a small man and a woman resembling Laura. She whispers into his ear. He wakes convinced that he knows the killer and calls Truman to arrange breakfast.