At the warehouse, Pete is playing with a samurai sword when Myka comes in. Artie comes in and explains that he created it, a copy of one of the finest katanas ever created. The real one was unearthed at Okinawa and is being presented as a gift to the U.S. President. The agents have to intercept it and return it to the warehouse.
At Kluger Electronics in Washington, a man meets with owner Eric Kluger, who complains that he's often been dismissed as a crackpot, particularly by his visitor's partner. The old man gives his visitor a suitcase full of canisters and the visitor shoots him with a Tesla gun.
Myka and Peter arrive at the Japanese embassy as Myka complains that Artie isn't giving them the full picture. As they pass a door, there's a flash of light and they're pulled toward it and then knocked out. A few seconds later, Peter partially recovers consciousness and catches a hazy glimpse of a man leaving with the sword.
As the agents recover, HAZMAT teams arrive at the embassy to investigate. Pete uses the Farnsworth to show Artie the embassy. They explain that the Japanese are holding them and that they think the sword was vaporized. When the agents describe the explosion's effects, Artie realizes it was an implosion and recognizes the effect. He tells them to get in and find anything they can. Leena wonders why he looks worried and Artie mutters something about the past and then leaves.
At the embassy, the security officer, Ogawa, asks Pete and Myka why the Secret Service sent two different units. Dickinson is there with his men and takes them back to his office to demand answers. Pete and Myka explain they're not allowed to have contact with him any more. Dickinson blames their problems on Artie and then wants to know what he's supposed to tell Ogawa. When they can't answer, he tells them to get out of D.C.
That night, Pete and Myka try to figure a way to get into the embassy room. Myka admits that she thought it would feel like coming home but she isn't so sure now. They're interrupted when Artie gets in the back seat. When they can't agree how to go in, Artie hands out goggles and then uses a rare Chinese firecracker. When the firecracker goes off, everyone in the embassy is entranced. They get inside and Artie confirms that an implosion grenade was used and that several embassy staff were killed as a result. They figure the thief used the bomb as a distraction. When Artie observes that he acquired all the implosion grenades years ago, they realize that they have a competitor.
Artie, Myka, and Pete check into a hotel and Artie tries to determine who could manufacture an implosion grenade. When the agents demand answers, Artie finally explains that the sword is so perfectly sharp that it splits light, making its wielder invisible. When Myka goes over the photo of the sword from the embassy, they realize that the hilt piece, the tsuba, is missing. Artie finds Kluger's address in the phone book and goes to talk to the man, noting that Kluger promised not to make implosion grenades again. Meanwhile, the agents try to find the tsuba. Pete calls Leena and asks for advice on what Artie would do. She suggests they look for collectors who deal in Japanese antiquities of the relevant period. Pete convinces her to go into Artie's files and check the info.
Artie arrives at Kluger Electronics and discovers that Kluger has been reduced to dust. Pete and Myka call to inform him that the tsuba is at Secret Service Headquarters: the Emperor presented it to the U.S. during World War II. It's going back to the museum in the morning. Artie figures it's no coincidence that both pieces are in Washington. He orders the agents to avoid warning Dickinson so they don't tip off the thief. Pete and Myka object, but they're interrupted when Artie find the remains of a roll of candy on the ground. Recognizing it, Artie mutters the name "James" and runs off.
Ogawa meets with Dickinson and claims Pete and Myka are compromised. He has a file on Artie that identifies him as a convicted espionage agent. Ogawa threatens to go to Dickinson's superiors if he can't handle it and then leaves. An agent brings in the tsuba and informs Dickinson that it's going back to the museum.
Artie calls someone and asks for a meeting.
Pete and Myka watch as the tsuba is transferred. Myka complains that Artie isn't giving them the info they need but Pete disagrees. The Secret Service agents take the tsuba into the museum but the thief attacks them with a Tesla gun. Pete opens fire and the two guns negate each other, knocking everyone back. Myka grabs the tsuba while Pete follows the thief out but loses him in the grounds. Myka arrives with the tsuba but the Secret Service agents arrive to take them prisoner, figuring they're the thieves since the Tesla gun wiped their short-term memories.
In the building, Pete tries to explain they're with a special archival division. The agents are understandably skeptical. Dickinson arrives and takes charge, freeing them. He warns that if they shut him out, he can't help them. When he starts to take the tsuba, they warn that it's dangerous but can't explain why. Dickinson shows them the file on Artie and tells them to read it. He returns to his office and orders increased security.
Artie meets with a woman, Carol, and tells her that it must be James. She's not thrilled with the fact that Artie talks in riddles, just like he did in the past. Carol admits she hasn't seen James in 15 years, but Artie insists he's not the one who drove James away. Carol is angry that Artie was the one who left and James was the one who believed in life. When she starts to walk away, Artie warns her that she's in danger if she's harboring James. She scoffs at him and leaves. Artie turns to discover Mrs. Frederic waiting for him. She wants to know why he's bothering Carol and torturing himself, and says that it's self-pity. Artie insists it's James MacPherson and shows her the candy. Frederic doesn't believe it and warns that his team is falling apart around him. She takes them all off the case and tells him to go home.
Back at their hotel, Pete and Myka are reading the files on Artie when he calls and tells them to wait there for him while he handles everything. Once he signs off, Pete insists that the files are false but Myka says that they're true. Artie used to work for the NSA as a cryptographer in his 20s. He started selling secrets to the Russians and was caught, but then disappeared.
Artie breaks into Secret Service headquarters and gets to Dickinson's safe. He gets the tsuba but Dickinson arrives and takes him prisoner, telling him he's under arrest for treason.
The next day, Pete and Myka meet with the captive Artie, who says that the charges are true. He tells them to concentrate on the mission, figuring Mrs. Frederic can fix it just like she did before. He hesitates and Myka insists that if he had kept them in the loop, they could have helped. Artie is trying to focus on Frederic's involvement with James but explains he changed his name to protect himself from the Soviets. He figures that someone has unfixed it, and tells them to find out who gave Dickinson the file. Whoever did so has the sword. As the agents leave, Dickinson tells them to save their own careers and get transferred. When they refuse, Dickinson tells them that he's sending them back to South Dakota with two of his agents. They notice that Ogawa is there to collect the tsuba and ask who gave him Artie's files. Dickinson refuses to tell them.
As the agents escort Pete and Myka to the airport, Pete finally remembers that Ogawa was the thief at the embassy. Now Ogawa is heading for the airport where he'll leave through the diplomatic gate.
Mrs. Frederic's bodyguard arrives with Artie's release papers.
As the escort agents stop at a red light, Myka tries to convince Pete to shoot the agents with the Tesla guns. He refuses and Myka takes the gun and stuns them so they can escape.
Mrs. Frederic is waiting outside for Artie. He apologizes for acting harshly but she notes that someone dug his files up. Frederic finally admits that MacPherson is responsible and Artie has to stop him.
At Dulles Airport, Ogawa goes to a private hanger and presents MacPherson with the tsuba. MacPherson attaches it to the sword and then draws it across himself, rendering him invisible. Outside, Artie takes out a Tesla gun and a pistol. He enters and finds Ogawa, seemingly alone. MacPherson decapitates Ogawa and then addresses Artie, greeting him. Artie notes that they had their differences but can't understand how he turned traitor. James appears behind him and disarms him, and then fades away again. He says that he gained clarity once he got out from under Mrs. Frederick and Artie, but Artie doesn't believe it. MacPherson appears briefly and says that Artie's new agents have potential. He fades away again and Artie vows he won't get them again. Artie grabs an emergency foam sprayers and tries to render MacPherson visible. MacPherson stabs him in the side but hesitates as Pete and Myka arrive. Artie hangs onto the sword and MacPherson is forced to flee. The agents arrive and Artie tells them to remove the sword. MacPherson tosses an implosion grenade into the hanger and they get outside just as it goes off, almost pulling them in.
Later, Leena admits to Pete and Myka that she wasn't there when things went bad between MacPherson and Artie, but it was bad. They put the sword into storage and Myka admits that she doesn't know how she can work with Artie. Leena explains that Artie has lost a lot of agents and tries to shut new ones out so he isn't hurt again, but Myka insists he's going to have to work it out because she's not expendable. From his office, Artie and Frederic watch Myka on the security cameras. Mrs. Frederic admits that Artie was right, but he warns that MacPherson has something big planned. Mrs. Frederic warns him to be careful.