Alone, Peter watches an old hologram message from Etta. Olivia arrives, and he confesses he just needed to see Etta. They watch the message. Olivia says they need to keep their communication open, to each understand what the other is going through. Peter agrees. But he lies when she asks about the bandage on his neck where he inserted the Observer chip.
Walter finds the seventh videotape and decides to follow the instructions alone. His arrival at 167 Cedar St. in Boston is captured by Observer surveillance. In Apartment 413, Walter consults his notes, steps out a pattern on the floor . . . and vanishes.
He emerges in a pocket universe where physics and time work differently. Walter created it 20 years ago to hide an important piece of the plan, with help from the mysterious Donald. Another man is there - not Donald, but Cecil, who accidentally fell through two decades ago when Observers light-bombed the building. Walter is strangely callous toward the man, who thinks he's only been there for five days.
Astrid, Peter, and Olivia are surprised to realize that Walter's gone off alone. The video ends after Donald records Walter doing the step pattern and entering the portal. The trio take the camera along so they can refer to the video.
Astrid waits in the apartment while Peter and Olivia enter the portal, finding Walter and Cecil. They learn more from material on the tape that only shows up in the pocket universe - including that what's hidden here is the Observer child ("Inner Child," Season 1, Episode 15).
They come to a corridor with doors marked by symbols (resembling the familiar glyphs of "Fringe"). The video shows Walter and Donald leading the child into the room behind the apple icon. The team enters and finds a portable air-degradation unit - but no child.
Walter despairs; now the plan can't work! But Olivia notices a transistor radio they didn't see on the tape. Maybe someone - perhaps Donald - left it there when he took the boy. But why move him?
Meanwhile, Captain Windmark's team swarms the building, and two Observers overpower Astrid. Using their Observer vision, they spot the portal. Cecil dies when they attack, but Peter somehow leads the others out of the pocket universe. He sends them ahead, saying they'll meet at the train station.
Peter engages an Observer and is seemingly outmatched . . . then suddenly counters his opponent's every blow. The Observer knows what Peter did and says he's made a grave mistake: "You do not realize what is happening to you." Peter teleports and snaps the Observer's neck, then pops out just as Windmark pops in.
Heading home on the train, Olivia finds the radio jammed at one frequency that's transmitting only static. Anguished, Walter privately tells Peter that his coldness toward Cecil, and his taking off alone, are actions of a man of hubris and arrogance. Since the pieces of his brain were reimplanted, he's been changing back into the man he was before. He's losing the man that Peter helped him become.
Peter promises that he won't let Walter go. But when he scans the train car, he sees it in Observer vision. What is Peter becoming?