911 gets a call from a man saying to send the police to Briarcliff, and that he's been a very busy boy. He refuses to give his name and says that the people he left were impostors. When the two officers arrive, they find the three Bloody Face imposters strung up and gutted.
Mrs. Reynolds brings her young daughter Jenny to Briarcliff and meets privately with Sister Jude. The mother explains that she has two other children and they're normal. However, Jenny has never cried and apparently killed her friend Josie with a pair of scissors. Jenny claimed that a bearded man killed Josie in the woods and threatened her. The police never found the bearded man and later, Mrs. Reynolds found a lock of Josie's hair in Jenny's coat pocket. Sister Jude says that they don't have a children's ward and advises Mrs. Reynolds to pray. The mother asks Sister Jude to talk to Jenny and wonders if the girl was born evil.
Lana wakes up in bed to the smell of cooking food. However, she soon remembers that Thredson, actually Bloody Face, captured her and imprisoned her in his basement. He's making breakfast and invites her to scream as much as she wants since the basement is soundproofed. Lana asks what Thredson did with Wendy's body and the killer assures her that he's made sure it will never be found, since it would reveal that Kit isn't Bloody Face. Thredson serves her and explains that he never knew his mother, who abandoned him when she was Lana's age. Lana realizes that he grew up an orphan and Thredson says that all of his basic needs were met but he never had affection.
The reporter compliments him on the food and assures him that she isn't trying to patronize him. She talks about how she knows what it's like to be abandoned and Thredson says that he was right that Lana is the one. He explains that he always knew that he was afflicted and that's why he went into psychiatry. It was at medical school that Thredson had his first breakthrough. He believed the first corpse that he studied was his mother because she was the same age... the same age as Lana. After the class, Thredson removed his shirt and touched the corpse, relishing in the skin-to-skin contact.
As Thredson talks, Lana takes his hand. The psychiatrist describes how the corpse smelled of formaldehyde, and then talks of how Rhesus monkeys would choose the softer dummy mother because of the skin. Thredson tells Lana that the corpse did nothing for his craving and that he needed someone a little more lively. After that, he brought his first victim to his basement and skinned her alive. Lana breaks into tears and Thredson tells her that it's all behind him... and calls her "Mommy."
Sister Jude receives a call from Sam, who says that he worked on her case despite her request to help. The nun tells him that the mental patient made it up, but Sam tells her that somehow "Anne" got it right. Arden was Hans Gruber, an SS officer and doctor at Auschwitz. Arden got an ID from the International Red Cross and Sam needs Arden's fingerprints to confirm who he really is. Sam warns Sister Jude that Arden is both a flight risk and dangerous, and will flee at any suspicion. As Sister Jude hangs up, she realizes that Jenny has come into her office. She introduces herself and says that her mother abandoned her there.
Monsignor Howard is called to the hospital to perform last rites for the nameless freak that was found at the elementary school. The administrator explains that the woman tested positive for TB despite its rarity and that the sight of her is quite shocking. Howard enters the room alone and realizes that the woman is Shelley.
After the Catholic Church purchases Briarcliff, Howard and Father James go to the main ward. Dr. Arden, the former supervising physician, explains that a few incurable TB patients are still there. One of them, Sally Starnes, is a former nurse who won't live until morning. Howard performs the last rites for her and then helps Arden takes her through the underground tunnel when Sally does. Arden explains that they incinerate the bodies in the crematorium and stores the ashes in hundreds of canister. Howard bemoans the wasted lives. However, the doctor is more concerned with the wasted opportunities and explains that since he's leaving Briarcliff he's also losing his research opportunities. When Howard expresses an interest, Arden tells him that he's been working on an immune booster that would stop diseases from taking hold in the human bodies. He tells Howard that human studies would have been the next step using people that have no other value... even in Rome.
Howard chokes Shelley to death with his rosary.
At his office, Arden listens to music when Howard stops the record and accuses him of being a monster. He says that he saw Shelley and knows what Arden did to her, and the doctor points out that they agreed to those kinds of experiments. Arden reminds Howard that each patient in Briarcliff is an example of evolutionary failure.
Spivey is in the broom closet watching Sister Mary Eunice undress through a peephole in her room's wall. Arden comes in and reminds him that he used to expose himself on playgrounds. Spivey insists that he's better and that it was Sister Mary Eunice who invited him to watch.
Arden tells Howard that his goal is to give wasted lives purpose and he's succeeded beyond his wildest dreams. Thanks to his experiments combining syphilis and tuberculosis, he's made superhuman beings. Arden invites Howard to see them and takes him to his lab. A man covered in boils is strapped to a table and Arden explains that his treatment lets the patient withstand nuclear radiation. When Howard says that he should be locked away, Arden reminds him that he has his blessing, facility, and subjects, and that if he goes to jail then Howard will as well. When Howard stops, Arden tells him that they have a common danger.
Sister Mary Eunice is cutting up food in the kitchen as Jenny watches. The girl asks to use a knife and the nun refuses. The nun asks about Jenny's mother and the girl explains that Mrs. Reynolds thinks she killed her friend. Sister Mary Eunice says that Jenny did kill her and she knows because she's the Devil. The nun says that Josie deserved to die and Jenny is lucky because she was born with the gift of authentic impulse. Mary Eunice remembers attending a pool party and being humiliated. She tells Jenny that there is no God and religion is just a way for people to keep them from doing what they want to do. When Jenny complains that they're going to lock her in her room, Sister Mary Eunice tells her that she's smarter than everyone else and has to learn to defend herself.
Sister Jude finishes a call as Howard comes in. She tells him about how Mrs. Reynolds left her daughter there. However, he says that he's contact Father Bernard in Pittsburgh and has recommended that he have Sister Jude go to help him with his home for wayward girls. Howard tells Sister Jude that she's lost her way and needs a new beginning, and she realizes that it's Arden's doing. The nun insists that she was right about the doctor but Howard walks out.
As a crying Sister Jude packs, Sister Mary Eunice comes in and tells her that Mrs. Reynolds came back to get Jenny. The older nun explains that she's leaving Briarcliff and Sister Mary Eunice wonders what will become of them. They hug and Sister Jude tells the younger nun to go to the kitchen and bring her the special bottle of cognac she keeps for the monsignor. As she leaves, Sister Mary Eunice glances at the open drawer with Sister Jude's red lingerie.
Thredson goes upstairs as his phone rings. It's Kit, who is making his one phone call to the psychiatrist. He reminds Thredson about their deal and explains that now he knows the truth that Grace saw Alma. Thredson tells him to take responsibility for what he did.
In the basement, Lana manages to grab a file and starts cutting through her leg chain.
Kit realizes that Thredson lied to him and calls him a phony lying bastard. The psychiatrist yells into the phone, telling him to stop, but Kit hangs up and goes back to his cell. Thredson slams the phone down and goes back downstairs, and Lana hides the file and crawls beneath the covers. The psychiatrist rambles on about Kit and his alien abduction fantasies, and then notices that Lana is sweating. He wonders what she's up to and notices the broken link, and accuses Lana of abandoning him just like his mother. Thredson chains her hands to the bed and says that she's a disappointment and that sometimes all someone can do is end it. He dons his Bloody Face mask and approaches Lana with a scalpel, saying it's her fault.
Sister Mary Eunice slips into Sister Jude's room later, puts on her red lingerie, and dances. The phone rings in the adjoining office and the nun answers it, posing as Sister Jude as Sam identifies himself.
Arden is in his office pruning his flowers when Sister Jude comes in with the cognac and two glasses. She pours one glass and offers him a toast on his victory, but he insists that she join him. The nun has no choice but to pour a drink her for herself. Once he's satisfied the cognac is safe, Arden drinks his glass and Sister Jude looks at the glass—and his fingerprints—in triumph.
Sister Mary Eunice goes to Sam's hotel room and says that Sister Jude doesn't know she's there.
Later, Sister Jude goes to Sam's room and hears the phone ringing inside. She knocks at the door but gets no answer. The door swings open and she goes inside. The room has been cleaned out and the phone continues ringing. Sister Jude answers it but the caller hangs up without saying anything. The nun hears a noise and turns to see Sam on the floor of the bathroom, a piece of broken mirror thrust into his neck. Sister Jude goes to him and figures that Arden did it, but Sam gasps out that one of her nuns murdered him.
Back at Briarcliff, Sister Mary Eunice shows Arden the files on Gruber and explains that Sister Jude was going to expose him. She assures "Hans" that she has taken care of, and Arden tells her never to call him that. When he asks if that's everything, Sister Mary Eunice says that she's hidden some of the evidence in case he tries to double-cross her. Arden insists that he's a visionary, not a monster, and he's forced to carry out his work in secret. The nun says that he doesn't have to explain to her and Arden wonders why she's protecting him. He asks what she wants and Sister Mary Eunice says that it's the beginning of a new era and he has to trust her with his entire soul. In return she promises Arden that everything will work out.
At the river, Jenny calmly tells the police that a bearded man killed her mother and siblings in the woods and threatened her if she tried to fight. After the officer takes her statement, Jenny toys with a hank of her mother's hair.
The masked Thredson cuts open Lana's blouse and describes what she will experience as he kills her. Crying, Thredson says that he always saw her as full of life, even before Briarcliff when he watched her.
Lana thrusts herself into the Bloody Face investigation and tells a fellow reporter, Phil, that even monsters don't start out that way. She then watches as Kit is taken into the station... and Thredson watches and listens from nearby.
The reporter insists that she understands Thredson and tells him not to feel guilty. Lana says that a mother's love is unconditional and that everyone deserves it, even Thredson. She calls him "baby" and Thredson rips off his mask and breaks into tears. He then says that baby needs colostrum and bends down to breast-feed from her.
The police lower the bodies the three bodies. As Detective John Grayson takes in the crime scene, his partner tells him that they found a car outside belonging to a Leo Morrison of California. They have yet to identify the three dead teenagers wearing the Bloody Face masks. The police find Leo's body and realize that his right arm is missing. As they begin a search, the detectives hear a phone ring in the next room. Leo's arm is on the floor and his phone is in the hand. Grayson answers it and Bloody Face says that he only killed the imposters. Grayson's partner says that he talked to Leo's sister and confirmed that he's on his honeymoon, and they wonder where Leo's wife is.
Teresa wakes up strapped to a table as Bloody Face enters the room.