A diner in Brooklyn, NY. A BALD MAN in a black suit orders a roast beef sandwich, drowning it in pepper and Tabasco, while eyeing a construction site across the street using a camera that's unlike any we've seen before. He jots notes in an indecipherable language - also unlike any we've seen before. Suddenly, seemingly out of nowhere, a massive explosion erupts at the construction site. As throngs of people run for cover, the bald man approaches the site of destruction and places a call: "It has arrived."
Boston. Walter keeps Peter up all night reciting the formula for root beer, and for Peter this is the last straw. The next day he tells Olivia he wants out of their arrangement. Olivia reminds Peter that Walter has stated he won't cooperate with the FBI unless Peter is there.
Chelsea, Mass. Broyles meets Olivia, Peter, and Walter at a warehouse, where he reveals that what appeared to be a gas main explosion in Brooklyn was in fact caused by a strange metal cylinder that emerged from underground. Although Walter appears to recognize the cylinder, he refuses to disclose what it is. Broyles explains that a cylinder like this appeared once before in 1987 in Quantico, Va., where COLONEL HENRY JACOBSON was the commanding officer. Olivia served under Col. Jacobson when she was in the Marines. Peter says this will be his last case -- then he's gone. Walter demands to study the cylinder back at his lab.
Olivia heads to Roseville, Va., to question Jacobson. He offers his condolences over the loss of her partner; he knew she and Agent Scott were close. When Olivia asks about the incident in 1987, Jacobson explains that 48 hours after the cylinder showed up, it exploded... downward. He warns her to stay away from the cylinder if she can.
While Walter runs tests on the cylinder at the lab, a mysterious ASSAILANT, armed with a strange gun, approaches the warehouse, shooting his way inside and demanding to know the whereabouts of the cylinder.
Olivia is awakened in the middle of the night by a phone call... a mysterious voice is on the other end. Is that John Scott? But when she runs a trace on the call, she's informed that there's no record of any call coming in.
Back at the lab, Peter continues to question Walter about the cylinder, but he still gets no answers. Walter does divulge that 20 years ago he worked on PROJECT THOR - an experimental project designed to launch a torpedo through the earth. Just then Olivia realizes that she's seen the Bald Man in the crime scene photo before! She saw him in a photo from the hospital (in episode 2, "The Same Old Story"). Meanwhile, the Assailant pays Jacobson a visit, shooting his way into the home.
Olivia shows Broyles her discovery about the Bald Man. Broyles leads her into a room covered wall to wall with photos of Pattern events -- all featuring the Bald Man. Broyles explains that he's been at over three dozen of these events. But all he does is watch... and so they call him "The Observer." As Olivia digests this new information, Broyles receives a call about the attack at the warehouse. Worried, Olivia calls Peter at the lab to warn him that someone is trying to get the cylinder. Walter tells Peter to get some aluminum foil to shield the cylinder's signal and keep it save... and he would also like a root beer float. As Peter runs out, Walter asks Astrid to bring him the syringe from a nearby table. She does, but when she turns around Walter injects her with the syringe, knocking her out.
Peter returns to find Astrid on the floor, regaining consciousness. At the same time, the Assailant fastens Jacobson to a strange machine, interrogating him about the cylinder's whereabouts... torturing him until Jacobson thinks of the answers, which somehow transfer to his captor without words.
A diner somewhere in Boston. Walter sits at a booth, ordering a root beer float. Across from him sits The Observer, thanking him for hiding the cylinder. Later, as the FBI and local police try to find Walter and the cylinder, Olivia gets a call: Walter has finally turned up, arrested for walking along the median of I-95.
During the interrogation, Walter refuses to reveal where he's hidden the cylinder -- but he confesses that someone's after it and he must keep the cylinder away from them for another four hours. Additionally, Walter reveals that he's spoken to The Observer. As Peter grows more insistent on answers, Walter erupts -- calling Peter small-minded, just like his mother, always questioning his judgment! As that rebuke lands like a bomb, Peter decides he has no reason left to stay and walks out. Back at the lab, Peter packs his belongings -- but before he can leave, the Assailant appears right behind him.
Olivia gets a call from Astrid: Peter's missing and there's been a struggle at the lab. In an undisclosed location, we see Peter strapped down, hooked up by the Assailant to his machine. Although Peter claims to have no idea how to find the cylinder, the Assailant continues interrogating him about his childhood, Walter, and most importantly, where Walter likes to hide things.
Olivia confronts Walter in the interrogation room with the information that Peter has been abducted. Walter's convinced Peter will lead the Assailant right to the cylinder.
Exhausted, beaten, and restrained, Peter unknowingly gives the Assailant the information he's looking for... without saying anything. They drive into the woods, where the Assailant leads Peter to Robert Bishop's cemetery plot and tells him to dig. The cylinder is buried in the grave. Just then Olivia shows up -- running through the woods in search of Peter, flashlight drawn. The Assailant grabs the Cylinder and runs! As Olivia gives chase, the Assailant fires his mysterious gun at her and misses, blowing up trees. Olivia returns fire and kills the Assailant. Just then there's an explosion -- and the cylinder vanishes into the ground.
The Observer, who has been standing watch, places a phone call: "Departure on schedule." Then he's tackled by Peter -- but when Peter speaks, the Observer just repeats Peter's words back to him. And then he says Peter's words at the same time as Peter... and then before Peter. He verbalizes what Peter's about to say before he even has a chance to say it... seemingly reading his mind. As Peter stands shocked, the Observer fires a gun that knocks him down, but leaves no mark, and leaves. Peter picks himself up as Olivia returns...
Back at the FBI, Charlie prepares to take Walter back to the hotel. But there's something Walter needs to do first. He approaches Astrid at her desk and apologizes. Astrid refuses to acknowledge him, offering a cold shoulder as she continues her work. It'll take some time for her to forgive.
At the hospital, Broyles tells Olivia that although there's no sign of the cylinder, they've identified the Assailant: JOHN MOSELY. He's wanted for double-homicide in Seattle. As Broyles walks off, Peter approaches, disturbed. He tells Olivia that the Observer was also in the woods and knew what he was going to say before he said it. Olivia's unsure whether Peter is right or just took a hard hit to the head. Olivia admits that it's wrong for her to make Peter stay. Peter explains that there are things going on now that affect him, and he's not going anywhere until he understands them. In that case -- Olivia hands him his new badge: civilian consultant to Homeland Security.
Peter returns to his hotel with about a thousand questions. Walter says that Peter knew where the cylinder was buried because Walter knew it. Walter goes on to recall an accident they had when Peter was a child, when their car went off the road into the ice and Peter was nearly killed. Walter says they were saved, pulled out of the car by The Observer. And somehow, inexplicably, The Observer was in his head, knew his thoughts, and he made it clear that he would need Walter's help one day. Walter knew he had to protect the capsule for the Observer, to return the favor for saving them.
Olivia returns home -- it's been a long day. She grabs a snack and a drink. Then she sees someone standing there... JOHN SCOTT, right there in her kitchen.