The episode begins with a young Shawn meeting Uncle Lou and his dad Henry. His dad looks a little disturbed and Uncle Lou is sure that Shawn can handle it. Henry tells him about a missing girl Veronica Town, a waitress wearing a red dress and a gold necklace with her initials on it and the whole thing is beginning to look like she is murdered. Cut to the present day, Shawn tells Gus that Jules and he are not thinking about marriage anytime soon. He is about to tell Gus more about them, when they arrive at the crime scene. Jules updates them with the case; unidentified white guy, dead and gun shot went to the face. The foreman on the construction site found the body.
Just then Shawn notices a necklace with the initials VT in a pile of mud that has been dug out. All of them go to inspect and find another dead body; and the corpse is wearing a red dress. He is reminded of the case he discussed with his uncle and dad. Next, we see the press gathered outside the office to question Vick. They want to know whether the body belonged to Veronica. But she doesn’t answer them. Woody tells the team that Shawn’s guess of the body being Veronica’s is spot on. He tells them that she was strangled to death. Henry thinks that Jordan Beaumont has killed her. He was her boss at the bar she worked at; the Blue Derby and her boyfriend as well. It appears that his father is the most successful businessman in Santabarbara. But he is dead and is the other dead body lying in front of them. So, now we have the body of a girl who was missing for the last twenty years and the dead body of the lead suspect’s father.
Vick tells Shawn and Gus to track down Jordan and Henry wants her to reinstate him on this case; just for this time. To everyone’s shock, she agrees. They meet Jordan and he remembers Henry. Jordan’s lawyer asks them to leave as Jordan’s father just passed away and he has arrangements to make. But Shawn notices that Jordan is about to renovate the giant house and asks him about the same. Shawn makes it obvious that he suspects Jordan for both the murders. But he says that he spent last night at his girlfriend, Thea’s house. But without arguing much they leave. Shawn had noticed a valet ticket on Jordan keys which was from the Beaumont Hotel, 207. They reach 207 and meet Thea there. Shawn has a talk with her. She instantly realizes that Shawn is Henry’s son. She tells him that before Beaumont she was in Michigan. She also tells him that she was with Jordan the previous night.
Jordan is taken for questioning, and Shawn tells Vick that there is a three hour gap in his alibi. Just then Woody arrives and tells Shawn and Henry that there was another DNA trace found on Veronica’s body and it belonged to Lou Gamble but Henry believes in his old partner. They meet Lou’s wife. She tells them that Lou had to take up a second job back then; at Blue Derby, where Veronica worked for Jordan and his father Ellis. But through all this, Gus is continuously eating candies and he tells Shawn, “I make the world taste good”. Henry recalls Lou calling in sick during Veronica’s investigation. He was definitely hiding something. They go to the Blue Derby. They meet a waitress who knows Henry. She tells them that Veronica was a bad waitress as she was sleeping with Jordan. She then disappeared for six months and when she came back, she got her job back easily. She tells them that Ellis would never let his son have ownership of anything. Shawn goes to check the kitchen, which hasn’t been operational since Ellis sold the place. Shawn wonders what Ellis would need a lot of security guards for.
Shawn figures out that they were making “crack” in the kitchen and tells it to Vick. Ellis Beaumont was pushing drugs and that’s how he made all his money. He was protected as one of the police officers, Lou, was working for him. Just then Shawn gets a threatening call, asking him to stay out of this and cuts the call. Woody calls them and tells them that Veronica had given birth to a child. Shawn and Gus find Jules’ photographs on Gus’ car windshield; just like the ones that were left on Lou’s wife’s car. Shawn tells Jules that someone is following her and intimidating him to drop the case. Henry finds out that Jordan was married to the waitress they met before at the Blue Derby. She tells them that she wanted children but Jordan was sterile and hence she ended the marriage. Shawn decides to go meet Dr. Rudolf; a name he remembers seeing on the business card that was with Veronica’s dead body.
He admits that he had delivered Veronica’s baby girl, Dahlia. Shawn retires for the day and someone follows him. He pins Shawn to a wall and threatens to drop the case. Next day they go to meet Jordan and Shawn punches him on his face. But Jordan tells him that he is innocent. And he is right! As Shawn receives a call from the anonymous guy once again. Lassie has traced that call and gives Shawn the address. He rushes to the place and find out it’s a PCO. Just then he sees his father’s colleague, Jack, who on seeing Shawn tries to run. Henry arrives and arrests Jack. Jack tells the team that he too worked for Ellis and he was the one who brought in Lou. He knew about Ellis’ dealings. Ellis had murdered Veronica and the Chief helped them cover the murder. Lou disposed the body. But Jack says that he did not kill Beaumont. Just then Shawn realizes something. Shawn goes to the Beaumont Hotel and tells Jordon that Thea is his sister.
Veronica slept with Ellis as well and got pregnant. But she wanted more and so Ellis killed her. He arranged Dahlia/Thea’s adoption. He tells Thea that Ellis was color blind like she was and that is how he figured it out. Thea confirms this. She tells Jordan that when she came to know the truth about Veronica, she decided to dig deeper into the case. She confronted Ellis and shot him. Looks like the case is solved. Jules and Shawn have a stroll in the park. Shawn arrives at the station and Henry tells the Chief that his detective days are over. He doesn’t want to do that job anymore. He is resigning. They decide to grab a beer. Henry wants to break the bad news to an old friend, Jerry. He was also a detective who worked with Henry, Lou and Jack.
While talking, Jerry lets something slip, saying that $50,000 was a lot back then. Just then Henry realizes that Jerry too worked at the Blue Derby. Meanwhile, at the station, Shawn finds out that Jerry too worked for the Blue Derby as one of the cops hands him a list of the cops who worked for Ellis. Shawn rushes to find his dad. Jerry draws his gun at Henry and fires a shot in his chest. The episode ends.