In this episode, we learn what lies at the root of Rumpelstiltskin's power; Emma and Regina spar again over a Storybrooke election.
Author’s note: Lines between paragraphs indicate scene changes between Fairy Tale Land and Storybrooke/present day.
In Fairy Tale Land, Rumpelstiltskin sits spinning in a tent. His son runs in to tell him that the neighbor girl is being taken away to join the duke's army. When the girl's mother pulls out a knife and tries to stab the duke (the king's emissary), a strange forcefield chokes her and her husband. In the distance, a hooded, cloaked figure called only "the Dark One" is seen casting the forcefield.
In Storybrooke, it is two weeks since Graham's death. Emma comes to Gold's shop (where he is using lanolin to waterproof some cloth) as he'd requested and he offers her his condolences. He points out that since she was Graham's deputy, she'll have to assume the job of sheriff. Gold offers Emma a keepsake from Graham's belongings (cleaned out of the apartment Graham rented from Gold). At first, Emma refuses, but she accepts a pair of walkie-talkies; Gold suggests Emma might use them to play with Henry, saying their time together is precious.
Emma finds Henry at the playground and offers him one of the walkie-talkies. Henry says they should stop Operation Cobra for a while because Henry thinks messing with the curse is what killed Graham. Emma doesn't agree, but Henry leaves it at that.
At the police station, Emma begins to put on the sheriff's badge, but Regina arrives and says she has the right to appoint a sheriff of her choosing. The person she has chosen is Sydney Glass, her yes-man from Storybrooke's Daily Mirror. Regina fires Emma. Emma insists that Graham knew what he was doing when he appointed her as deputy, and Regina won't be getting the department back into her clutches.
At home with Mary-Margaret, Emma expresses her frustration at Regina's actions when Mr. Gold arrives at the house asking to speak with her. Gold reveals that Regina is an enemy of his and presents a copy of the town charter. The documents reveal that the mayor is not as powerful as she initially seems.
Rumpelstiltskin wakes his son at night, two days before the birthday that will make him eligible for military service. On their way out of the village, the two give alms to a poor beggar on the road. Just then, the duke arrives and demands to know why they are on the king's road. The duke reveals to Rumpelstiltskin's son that his father had deserted the war effort, effectively ensuring that the other soldiers in his regiment were killed in the ogre war, and when he arrived back from the front, his wife left him. The duke demands Rumpelstiltskin's son, but Rumpelstiltskin pleads with him. The duke says he will spare Rumpelstiltskin's son in exchange for fealty, demanding he kiss the duke's boot. The duke kicks Rumpelstiltskin to the ground.
The beggar to whom Rumpelstiltskin gave alms along the road comes and helps him up, saying one day he'll find a way to be Rumpelstiltskin's benefactor.
Regina holds a press conference to appoint Sydney Glass as sheriff of Storybrooke when Emma interrupts. She says that the town charter only gives Regina the power to appoint a candidate, followed by an election. Emma says she plans to run.
Back at Rumpelstiltskin's tent, he and the beggar discuss Rumpelstiltskin's desperation to avoid losing his son. The beggar tells Rumpelstiltskin that with power, he need not be a coward any longer. The beggar says that the duke enslaves the Dark One with the help of a magical dagger engraved with the Dark One's true name. He says that if Rumpelstiltskin were to steal the dagger, then he would be able to control the Dark One and then no one would be able to take his son. Rumpelstiltskin doesn't like the idea of enslaving the Dark One, so the beggar says that he should simply take the power for himself instead.
Regina enters Gold's shop, complaining of his "trifling with technicalities." She asks how he dares to go up against her, and Gold explains that the two of them are both for the common good; they've just chosen different sides. Regina says that Emma will lose; Gold tells her not to underestimate someone who is acting for their child. Regina says Henry is not Emma's child legally, and Gold says, "Now who is trifling with technicalities?"
Emma finds Henry at Granny's Diner. He's reading the Daily Mirror, whose front-page story is an exposé Sydney Glass has written on Emma. The story reveals that Henry was born while Emma was in prison. Henry warns Emma not to owe Gold any more favors because he's worse than Regina.
Emma confronts Regina about the story as she is leaving Town Hall for the day, complaining that it was a sealed juvenile record and that it is hurting Henry to know it. Regina says he'd have learned it sooner or later and informs Emma that she and Sydney can have it out at the forthcoming debate. As Emma and Regina reach the bottom of the stairwell of Town Hall, an explosion blows a door back, injuring Regina. She asks Emma to help get her out of the building; Emma hesitates.
Rumpelstiltskin explains to his son his scheme to take the Dark One's power, by killing him with the dagger engraved with his name. Rumpelstiltskin tells his son that with that power, he would save all the children of the land from having to fight. His son says he's willing to fight, but Rumpelstiltskin tells him the king doesn't want him to fight, he wants him to die. His son asks if it is true that RUmpelstiltskin ran and that his mother is dead; he says yes.
Emma runs into the flames, grabbing a fire extinguisher and helping Regina through the fire. As they exit Town Hall, a photographer snaps a photo. The Storybrooke citizens proclaim Emma a hero, but as she inspects the materials pulled from the burnt building, she suspects arson.
Emma confronts Gold at his shop, asking if he set the fire since there was a large fuse that smelled of lanolin. Gold blames it on construction work in the area, but says that if he had done it, there was no way for Emma to win the election without something big. He warns Emma about walking away from the election and who she might be disappointing by doing so.
At the duke's castle, Rumpelstiltskin and his son set fire to a haystack outside the castle walls that spreads to wooden structures in and around it. In the castle, Rumpelstiltskin finds the dagger engraved with the word "Zoso" and steals it.
At Town Hall, Mary-Margaret runs into David as she puts up posters prior to the debate. David says he got a job at the local animal shelter. He is campaigning for Regina since his wife is frinds with her.
Backstage, Emma tells Mary-Margaret that she is worried that she'll disappoint Henry; she wants to show him that good can win, but isn't convinced that she can win the fight the way Regina plays.
Rumpelstiltskin sends his son home, though his son says he has a bad feeling. Rumpelstiltskin summons Zoso with the dagger. Zoso appears, warning Rumpelstiltskin that it would be a poor bargain to lay down his soul for a son that may not be his. Enraged, Rumpelstiltskin plunges the dagger into Zoso's chest, but instead of killing him, it merely turns him "normal": he's the beggar from the forest. Zoso informs Rumpelstiltskin that magic always comes with a price. As he extracts the dagger from Zoso's chest, he sees that it now bears his own name.
At the debate, Emma makes a stand and confesses that the fire was a setup and that Mr. Gold was possibly behind it. She apologizes, and Gold leaves the room.
Henry finds Emma at Granny's Diner, where she's been drinking. He hands her one of the walkie-talkies and tells her that heroes do things like expose untruths. He says he never should have given up on Operation Cobra. Regina and Sydney arrive to tell Emma that she won the vote; the Storybrooke citizens liked the idea of having a sheriff who was brave enough to stand up to Mr. Gold. Regina warns her that while Gold makes a powerful ally, he makes a superlative enemy.
The knight arrives to take Rumpelstiltskin's son, but Rumpelstiltskin reveals himself as the new dark one and kills the knight and his associates. His son says he's scared of his father now.
Gold arrives at the police station, saying that Emma's defiance of Gold was actually a setup--the only way to get the citizens to vote against Regina. Emma asks why Gold did this, and he reminds her of the deal they made a while back. He says that now that she's sheriff, he's sure he'll find a way for her to repay him.
An ongoing list of questions that hopefully will be answered in future episodes.
-What becomes of Rumpelstiltskin's son?
-How will Emma be asked to pay Mr. Gold back?
-The preview of next week's episode features a blind witch; is this the same blind witch from episode two? (This writer was banking on that being Rapunzel's witch, not Hansel & Gretel's witch.)