The episode begins with an afternoon in Woodbury, where it seems business as usual. Milton brings Andrea a cool drink during what appears to be a neighborhood block party. Andrea seems at home from the look of things. Michonne, on the other hand coolly surveys the scene, and seems oblivious to all that is happening. Inside, the Governor lovingly combs a little girl's hair until the pint-sized walker tries to bite his hand. The Governor as a result puts a sack over her head and then tries to calm his daughter. "Daddy still loves you" he tells her, trying to soothe her, while she struggles.
At the prison, Daryl and Maggie decide to run into town to find formula for Lori's baby, as they figure out from the crying that the baby must be really hungry. Rick, in the meantime, grabs an axe and charges inside, vengeance written all over his face. He splits a few walker skulls in a blind, grief-stricken rage. The Governor addresses his people, toasting their survival and the launch of a new civilization in Woodbury. While the Governor is at it, Michonne takes the opportunity to sneak inside the Governor's house to take back her sword. While searching for her sword, she finds a journal with crazy, obsessive scratches inside, which visibly surprises her. She then hears some conversation, and is immediately on the alert.
She then hides moments before the Governor, Milton, and Merle, enter. Milton wants to postpone tonight's festivities for his "experiment," but the Governor doesn’t think it’s a good idea and therefore turns down this suggestion of his. Michonne then sneaks out and finds an old warehouse full of zombies and is visibly shocked. She lets them out, and then hacks them to pieces with her reclaimed sword. Moments later, a man appears carrying a bloody bucket of zombie food, in order to feed the zombies that Michonne is in the process of slaying. She is caught red handed, as the man arrives while Michonne is still at it. The Governor then sits down with Michonne to have a talk with her, regarding her actions. She in turn mentions the name Penny, a name she saw underlined in the Governor's diary.
He is taken aback on hearing Michonne say the name, but quickly recovers from his shock, and does his best to reveal very little emotions. "You've broken the rules," he says, pretending to pay no heed to what she has just said. "If I don't do something, I invite anarchy" he adds, explaining his position. During the course of the conversation, Michonne manages to unsheathe her sword without the Governor being aware of it till the last moment. She then holds it to the Governor's neck, much to his shock and horror. She then slowly, backs out of the house. Merle enters just then. "She's all personality, that one," the Governor says, commenting on what Michonne has just done.
The Governor later summons Andrea and explains that Michonne has broken the rules, by doing what she has done. "What works out there does not work in here," the Governor says, elaborating further. "We're not barbarians" he tells her, expressing his disapproval of Michonne’s actions. Andrea then goes to Michonne, who demands to leave once again. "No one who comes here leaves" she says tells Michonne, with visible agitation. Andrea explains that she wants to give Woodbury a "real shot", as she is sold to its idea. Michonne insists that the Governor is keeping secrets and that there is more to him than meets the eye. Andrea though doesn’t seem convinced. Glenn heads into the prison to find Rick, who still, hasn’t returned.
He runs into a trail of massacred walkers before finding an unresponsive Rick holding a blood soaked axe. Glenn tries to talk the group leader into coming outside, but Rick responds by shoving Glenn hard, much to his shock. Rick apparently does not seem in the mood to relent and seems to be in a visible state of emotional pain. The Governor, Merle, and Milton drive out to a field where they have trapped a number of walkers. Milton picks and chooses among them for his experiments. Merle is only too happy to violently dispatch the rest, after Milton has chosen his lot. Maggie and Daryl on the other hand soon arrive at an abandoned daycare center and start loading up on supplies they shall need, for the newborn.
They hear scratching behind a door and are immediately on the alert. The two then discover that it’s only a possum. "Dinner," says Daryl, who shoots it with his crossbow. Back at Woodbury, Andrea and Michonne head out of town with their packed bags. Merle opens the doors for the pair, without exhibiting any resistance. Andrea on seeing this believes her point is proven they are not prisoners, or they wouldn’t have been let go this easily. She wants to stay, now that her point has been proven. "I'm tired," Andrea says, trying to make her point. "We always talked about this place, didn't we? A refuge?" she adds, trying her best to reason with Michonne, who still seems unmoved. At the end, Michonne will hear none of it and gives Andrea a choice: stay without her or go with her.
Andrea makes her choice. Michonne then walks out of Woodbury alone, as Andrea has decided to give Woodbury a chance. In the meantime, it isn't until after nightfall that Daryl and Maggie return to the prison, after having secured the necessary supplies for the newborn. Daryl takes charge of the bottle and quiets the screeching baby with a drink. Carl says he was thinking of names for the kid and rattles off the names of their departed friends, including Lori, as options. Daryl suggests "little asskicker", while they are at it.
Rick, on the other hand, finds the spot where Lori was cut open, but doesn't find Lori. He does find a walker with a bloated belly nearby, and is visibly enraged. He stabs its belly over and over in an absolute fit of rage. Back in Woodbury, the "festivities" begin. Basically, the town assembles and cheers as if for a sporting event as Merle and another man meet within a ring of chained walkers for a mixed martial arts kind of battle. After the first round, the zombies' chains are given more slack, tightening the ring. Andrea is horrified, at what she is witnessing. "This is sick," she says, commenting on all that is transpiring. The Governor explains that it's all staged, trying to assuage her.
The walker’s teeth have been pulled, he further explains, suggesting that the people in the ring aren’t in any sort of a risk. "We're shining light on the monster under the bed," the Governor says. "It's fun ... We're teaching them not to be afraid", he adds further elaborating on the reasons of the ritual. In the ring, on the other hand, Merle has bested his opponent and soaks in the crowd's cheers, as a result of it. Back in the prison, Rick is startled from his stupor by a ringing phone. He picks up the receiver, with trepidation. "Hello?" he says. The episode ends at this point.