Dr. Sumner, from St. Clare's mental institution, is having his monthly visit with Walter. He asks Walter about covering all the lab's reflective surfaces and his claims of seeing a strange man. Walter says that those were just minor hallucinations caused by self-medication. That hasn't happened for weeks now. But he's lying; he sees Peter's reflection in the doctor's clipboard.
In Boston's Hyde Park, a boy named Aaron runs from two older bullies into a dank tunnel covered with graffiti. Inside, his pursuers feel something under their skin. A tentacle bursts out of one boy's mouth, and Aaron flees.
Olivia is running a facial-recognition software program and drawing a picture we don't see. Agent Lincoln Lee arrives, as requested. She just wanted him to know that she's here to talk if he's freaked out by anything in the Fringe files. Slightly puzzled, he says he's not freaked out.
At the Hyde Park tunnel, Broyles privately asks Olivia why she brought Agent Lee; he's only authorized to look at the shapeshifter files. She says that they need more help against the Other Side, and she basically railroads Broyles into accepting Lincoln completely. Exasperated, Broyles says that she really reminds him of Nina sometimes.
The boys' bodies are severely decomposed, even though it's only been one night. Broyles takes one body to the lab and tells Walter that Dr. Sumner is concerned he's hiding something.Walter deflects, insisting that he needs both bodies for his analysis. He hears Peter's voice and starts talking loudly, then covers his ears and bellows, "I'm not losing my mind!" Recovering his composure, Walter asks the startled Broyles to send the other body from the morgue.
Olivia takes Aaron to Walter for a blood test. He's 10 years old, quiet and lonely. Seeing his drawings in a notebook, Olivia says that she likes to draw too.
When Aaron picks up a small action figure, Walter shouts, "Don't touch that!" He grabs it, then apologizes, explaining it belonged to his dead son.
Astrid shows Walter something weird about the body. They isolate it in an incubation case, just as the corpse BURSTS! Powder and goo spew inside the big plastic box. At the morgue, the other body bursts, killing two attendants. Black tendrils snake around the room.
Walter explains that this is a genetic mutation of the parasitic Cordyceps fungus, which releases neurotoxins that paralyze its hosts, usually insects. It's growing and absorbing nutrition quickly; hence, the bodies' rapid decomposition. A strong dose of ultraviolet light or intense heat should kill it. Olivia and Lincoln take a team to the tunnel - with flamethrowers.
Aaron can go home, but nobody's there. Walter sympathizes and says that Aaron can stay with him a while if he wants. They make tinfoil hats, and Walter whips up strawberry milkshakes with nutmeg, his son Peter's favorite. Aaron asks how he died. Walter tells him about his failure to cure Peter, and the alternate universe with the other Peter, who was also dying. When Walter crossed over and brought that boy back to cure him, the frozen lake where he created the portal cracked, and the other Peter drowned. He lost him all over again.
As Lincoln shines a spotlight on the fungus, Olivia sees drawings on the tunnel wall that look like Aaron's sketches. At the lab, Aaron yells, "It's too bright!" And when agents fire up the flamethrowers, Aaron burns with fever. Walter figures out that Aaron somehow feels whatever the fungus feels, and the boy admits that he'd been in the tunnel before. At first he just wanted to get away. Then he started feeling better, like he wasn't alone. He led those boys there because the fungus told him to, but he didn't know what would happen.
The fungus, which Walter nicknames Gus, is a vast neural network. Or, as Lincoln says, one big giant brain. Conscious of being alone in the world itself, Gus forged a psychic link with lonely Aaron. And any assault on Gus will hurt Aaron. Walter's frantic to save Aaron; clearly, he's thinking of both Peters.
But the fungus is spreading. Nina Sharp and Massive Dynamic send over a lethal toxin, and Olivia reluctantly has the MD tech inject Gus. Aaron passes out, and a fungus tendril kills the tech. More tendrils trap Lincoln. Walter realizes that Aaron has to break his emotional link with the fungus, but the boy resists letting go of his "friend." Walter weeps and says that he doesn't want to lose him, "not again." Finally, Aaron lets go.
Olivia pulls Lincoln away from the dying fungus. He looks up and says, "Hey, you look a little freaked out. You wanna talk about it?"
Walter gives Peter's action figure to Aaron. He wishes he could go to the hospital with Aaron, but - he spots Peter in a nearby reflection - he has things to do.
Walter starts to attempt a self-lobotomy. Olivia comes along and calmly stops him. What was he thinking? He's terrified of being recommitted; he's been hallucinating for weeks and can't stop. It's a young man, whose voice is in his head, saying peculiar things. Olivia shows Walter the drawing she did earlier. It's Peter. She's been dreaming of him for the past three weeks. Relieved, Walter asks who he is. She doesn't know, but she's trying to track him down. Walter says if they're both seeing him, he must be real. "And if he's real, we have to find him."