It's time to finally meet young Emma Swan. Fresh out of the foster care system, Emma has turned to a life of crime, stealing a very familiar yellow VW Beetle with practiced ease. But her masterful crime seems to be foiled when a man suddenly sits up from the back seat. Wait a minute, that's the guy from the beginning of the season 2 premiere! The one who got that mysterious postcard. He introduces himself as Neal Cassidy, and as a freaked out Emma drives them around, she accidentally runs a Stop sign and gets pulled over. Neal thinks quickly and talks their way out of a ticket. Emma realizes this isn't Neal's car, either. And it looks like these two criminal masterminds may just be hitting it off.
In post-Curse Fairy Tale Land, Hook has led the four princesses to a beanstalk, where he tells them a magical compass they need to travel between worlds awaits at the top, along with the last, most deadly of all Giants. It seems Jack and his band of humans fought a war with the vicious Giants a long time ago, and there is a single survivor that they will need to get past to get what they need to go home. Hook and Emma climb the beanstalk and emerge at the top. She tries to act like it's not working, but it seems that Hook's devilish smile and swagger may actually be sparking something for Emma. But when the Giant arrives, she's all business, using a magic sleeping powder Mulan gave her to knock out the Giant and start digging through his treasure for that magic compass.
Back to young Emma, who now appears to be pregnant as she and Neal rip off a convenience store. But when a customer almost catches them in the act, she fakes going into labor to rush herself and Neal out of there. When they get to their stolen Beetle, she pulls off a fake stomach full of loot. She's not even pregnant! With the close call, Neal and Emma talk about settling down and quitting their life of crime. They decide to move to Tallahassee. But when Neal sees a wanted poster with his name and face on it, he freaks out. It turns out he stole a bunch of watches from one of his former employers and stashed them in a storage locker. Emma volunteers to get them so Neal can fence them and they can make that move. Neal is on his way to set things up with his fence when he's chased down by a mysterious stranger. THE stranger, August Booth-who we now know is Pinocchio. He shows Neal something he has hidden in his typewriter box and lays out the whole story for him about what Emma needs to do. He tells Neal that, if he loves Emma, he won't go meet her.
Young Emma shows up for the meet, expecting to find Neal waiting for her with a bunch of cash and a trip to Tallahassee. But Neal's not there, the cops are. She's arrested and told that her boyfriend called in an anonymous tip on her. He ran away with the money and left her to take the fall. Later, Neal meets with August, where he hands over an envelope with the keys to the Beetle and the $20,000 that he made from selling the stolen watches. Neal asks August to give it all to Emma when she gets out and to help her like he was supposed to be doing her whole life. He asks if he'll ever get to see her again, and August responds that if the Curse is ever broken, he'll send him a postcard. It looks like he was true to his word on that one, at least. But when Emma gets the envelope in jail, the money is gone. She gets the keys to a now-legit Beetle, and she's holding in her hand a positive pregnancy test. It looks like Neal is Henry's father after all!
That kind of betrayal can give anyone trust issues, so it makes sense that Emma is having trouble trusting Hook. When the Giant suddenly reawakens, the two get separated. She faces the massive man alone, and is able to trap him and use Jack's poisoned sword to get the Giant to give her the compass. The Giant insists it was Jack and the humans who started the war and hunted his people down. He's sure that Emma's no different and that she'll kill him no matter what. Emma proves him wrong and lets him live in exchange for the compass and a favor. She gets back to Hook, but shackles him, leaving him in the care of the Giant who has sworn to release Hook in ten hours. He seems genuinely hurt and obviously upset, but Emma says she can't take a chance on someone betraying her again. She gets to the bottom of the beanstalk and the four princesses set off to get those magical wardrobe ashes from Cora.
Meanwhile, in Storybrooke, Henry wakes up screaming from a nightmare. He describes a red room with no doors or windows and red curtains that are on fire. And on the other side of the room, a woman's eyes staring at him. In Fairy Tale Land, Aurora is having the same dream, but with male eyes on the other side. We're left to wonder just what this revelation means until the next episode, but it's certainly terrifying to both Henry and Aurora.