As a child, Chuck and her father Charles Charles played desert adventurer and talked of exploring the world. However, when he died their dreams came to nothing.
In the present, Ned confronts Chuck and her bandage-wrapped father. Before they can discuss the fact that Charles is alive again, Lily and Vivian barge in. Chuck and Charles hide in the closet and she explains to her father that she knows Lily is her mother, while Ned tries to stammer out an explanation. Lily doesn't believe him and hears a noise from the closet, but yanks it open to find... a toy clown. Due to an unfortunate childhood incident, Lily is terrified of clowns and blasts this one with a shotgun. Vivian is forced to take her sobbing sister away. Chuck placed the toy clown there to distract her mother.
At the Pie Hole, Chuck explains to Ned what happened and how she was overjoyed at the possibility of her father coming back. Ned admits that he felt the same way when he had the chance to bring her back and can understand. She apologizes for deceiving him and they (carefully) hug. As Ned wonders what to do about Charles, they see a light shining on the storm clouds with the silhouette of a corpse: it's Nora McQuoddy the lighthouse keeper at the Papen County Lighthouse. As it turns out, Nora was killed by a mysterious figure wearing a yellow raincoat wielding a harpoon gun. The killer left Nora pinned to the lighthouse light and turned it on.
The gang watches the broadcast on the news, where the police announce that the leading suspect is Nora's husband Merle McQuoddy. Olive turns off the lights and tells them the tale of Merle McQuoddy, who disappeared at sea 10 years ago. It was believed his ghost haunted the local sea caves. However, in reality he was washed up on a deserted island and lived there for nine years until a gay family cruise ship rescued him. Now he roams the beaches around the lighthouse. Olive is interrupted when Merle's son Elliot arrives. He wants to hire Emerson to clear his father of the murder charge. He wasn’t at home when the murder takes place, but insists his father is innocent. Emerson hates the rain and figures Merle is the killer, but Chuck offers him a third of her cut from Elliot's meager savings and Emerson reluctantly agrees. She leaves, pleading personal business.
Ned and Emerson go to the morgue and discuss Charles. Emerson warns that Charles is an ex-soldier and isn't going to want to live in Ned's apartment the way that Chuck is willing too. He suggests that Ned kill Charles again but Ned doesn’t want to ruin Chuck's happiness. They discover that the heat of the light melted Nora's face to the glass. Ned brings her back and she uses Morse code to tap out the letters P-C-H-S. Her minute runs out before she can say more, but Emerson recognizes the letters as an acronym for the Papen County Historical Society. As they depart, Olive arrives with raincoats for everyone and is eager to join the investigation. Ned tells her to go ahead while he tends to personal business.
Chuck is at Ned's old house with her father, who wants to eat cake and wonders when she decided to settle for plain, ordinary pie. Ned arrives and says that they need to get Charles to his apartment. Charles isn't willing and has his own concern: that Ned could accidentally touch and kill Chuck at any time. He agrees to go with Ned on one condition: Ned stay away from Chuck for the rest of their lives.
Emerson and Olive start their investigation by talking to Augustus Papen, a son of Papen County's first family of Papens. He explains that he represented the PCHS and had the lighthouse declared a historical monument. Augustus made the McQuoddys the guardians and Elliot inherits the ownership. He claims he didn't know Nora very well and suggests they talk to Annabelle Vandersloop, a widow who built commemorative dioramas with Nora.
Chuck, Charles, and Ned go to Ned's apartment and Chuck sets her father up with what he needs, including her childhood souvenir box. After she's gone, Ned gives Charles the book of rules he's created for living in his apartment. Charles has more important things in mind: he wants an apology from Ned for killing him.
Emerson and Olive talk to Annabelle Vandersloop, who explains that she and Nora both build commemorative dioramas for their dead husbands. Annabelle's was of her husband's munitions plant, complete with miniature glitter explosions. Annabelle says that Nora was upset that her recently returned husband and her son Elliot wanted to go on an around-the-world sailing trip, and the family argued constantly. Nora refused to let them go on the trip and Nora figures that it was then that Merle decided to murder his wife. As she goes, Olive asks if she could build dioramas with her since she has a dead horse. Annabelle snidely notes that a dead horse isn't the same as a dead husband and leaves with her diorama in tow.
The pair go to the lighthouse and find realtor Willie Gherkin packing up. He was planning on holding an open house for selling the lighthouse until he just discovered that Augustus had it declared a historical monument. Willie paid Elliot $10,000 as an up-front fee on the lighthouse and now Elliot appears to have disappeared. Emerson figures Elliot made the deal to get the money to go on the sailing trip with his father. Olive points out they couldn't have left due to the storm and they'll need to search outside. Emerson doesn't want to and explains that he hates rainy days because they were the best times when he was with his wife. However, Olive figures that Elliot and Merle are hiding in the sea caves that Merle was rumored to haunt.
At the Pie Hole, Ned is making pies and admits to Chuck that he's frightened of her father. Chuck thinks this is their chance for a normal teenage life: Ned as the captain of the football team and Chuck as his girlfriend the cheerleader with an angry father. Ned finds the idea attractive and Chuck says they can still see each other outside of Ned's apartment, since Charles will never leave there. They kiss (through cellophane) and she leaves, and Ned discovers that Charles has left his apartment and sitting in the Pie Hole watching. Ned tries to get him to leave and when that doesn't work, announces a gas leak to get everyone out. Ned is worried that Charles is out and about but Charles says that he's been walking around for an hour and everyone thought he was a burn victim because of the bandages. Charles figures that since Ned isn't abiding by their deal, he won't either. Ned insists that his first concern is Chuck's safety but Charles doesn't believe him and attacks. After a few minutes of sparring with a broom and a mop, Ned manages to lock Charles in the pantry.
In the caves, Olive and Emerson find Merle packing supplies. Elliot is out getting more supplies and Merle says that he was in the caves when Nora was killed. He and Nora tried to make a new start with their marriage returned, but she confessed she had slept with another man. Merle never learned the man's name but does have a wooden Dutch love spoon that Nora received from her lover. It has the initials A.P. on it: Augustus Papen.
Chuck returns to the Pie Hole and sees the place is in a shambles. She goes to see her father, who claims that Ned attacked him. She believes him and confronts Ned, saying she's having trouble with the whole situation. Ned is concerned that Charles will do whatever he wants and reveal their secret, which would be bad for her and him. Ned admits he can't handle Charles and tells Chuck she'll need to deal with it, and she angrily leaves him. She confronts her father, who hands her a wooden spoon and tells her to drop it on a map of the world. They'll go there on the adventure they never had because he died. He wants to keep her safe and can't understand how Chuck can live confined after wanting her freedom so much. Charles promises they can do anything they want, anywhere they want, and asks her to choose to stay or go.
Annabelle comes to Emerson's office and Olive informs her about Nora's affair. Annabelle is more interested in reminding Olive about her dead horse. As she leaves, she bumps into Emerson, getting diorama paper-mâché on him. Emerson informs Olive that he broke into Augustus' office and has found plans to turn the lighthouse into a waterpark/hotel complex. He figures that Gus needs to make a major real estate deal to impress his rich family, and killed Nora so he can take the land. However, Augustus has to kill one person to get the lighthouse: Elliot McQuoddy. They find a note among Augustus' plans asking for a meeting at the lighthouse.
Olive and Emerson go to the lighthouse and see Elliot dangling from the top, holding onto a string of signal flags. Augustus is holding onto the line at the top. The duo confronts him and Augustus explains that he's trying to save Elliot and together they pull the boy up. Elliot was trying to put up the flags like Nora would have, but slipped and fell. They wonder why Augustus was there... and find a figure in a yellow raincoat waiting for them with a harpoon gun. However, when the man fires it, it reveals a flag announcing the Papen Lighthouse Hotel/Spa. A chorus of men come in to demonstrate their opening musical number for the cocktail hour. Augustus explains he and Nora were working together to make the water park and he set up the meeting with Elliot to pitch him on the arrangement. Augustus and Nora never told Merle, hoping that Nora could patch things up with him before the sale.
The question now is, if Augustus didn't kill Nora, who did? Olive spots some glitter on the lighthouse windows, the same as on Annabelle's diorama. She also spots paper-mâché on Augustus' head. He explains that Nora was in love with him but he was in love with Nora and never accepted her advances except once years ago. They go downstairs only to discover Annabelle with a match, a trail of gunpowder, and a barrel of explosives courtesy of her late husband. She's ready to blow them all up, including Augustus for scorning her, but Olive approaches her and says she can understand what it's like to watch the man you love with another woman. She inadvertently mentions Ned's name instead of Augustus'. However, when Olive gets close enough, she bows out Annabelle's match.
Annabelle gets a 30-year prison sentence. Merle and Elliot sell the lighthouse to Augustus and use the funds to take their sailing trip. Emerson gets a lot of reward money thanks to Augustus and the PCHS. He calls Olive in and gives her half, and asks if she still loves Ned. Olive admits she does and he wonders if she plans to kill Chuck or Ned over it. Olive assures him that she doesn't have any plans. Emerson admits that Olive impressed him and if she ever wants to move on, she can have a job as a junior partner. He thanks her for teaching him to appreciate rainy days.
As the rain turns to snow, Chuck and Ned talk outside the Pie Hole. Chuck explains that she loves her father but he's treating her like the child that she was when he died. Charles wants to protect her but Chuck is happy with her new life at the Pie Hole with Ned and has chosen him. She says Charles is waiting upstairs to apologize. However, when they go upstairs they find the map, the wooden spoon, and Charles' note saying, "I choose too." They run downstairs and see Charles driving away into the night.