As we all know by now, this episode picks up four months ago, immediately after Nathan tells Peter he saved the cheerleader... so they could save the world.
And up, up and away go the Petrelil brothers. Peter tells Nathan he can't fly because it's taking all hit powers not to explode (and a major snag from the season one finale is answered, thanks Tim Kring!), so he breaks away from his brother just as the explosion occurs. Nathan, however, has gotten badly burned from carrying his fiery brother.
Just as it appears as though Nathan is gonna fall to his death, Peter - explosion over with - swoops in and carries his brother to safety. He deposits a very badly burned Nathan at the hospital, only to be subsequently shot with electricity by Elle and taken to a facility where Bob tells him the following: 30 years ago, the older generation of Heroes were researching a cure to rid people of their powers. That research was cut off, however... until now.
If Peter accepts, they'll shoot him full of pills and make sure he never hurts anyone he loves again. Peter does accept. The treatment begins, with Peter being essentially held in a cell while Elle delivers him a daily dose of pills every day. This young woman also flirts like crazy with our handsome hero, eventually telling him all the mischief she caused growing up (such as burning down her grandmother's home by accident) that has landed her in this facility for good.
Meanwhile, D.L. actually lived after being shot during the season one finale. He's recovering in a hospital bed when Niki is approached by Bob. He says he's covered their hospital bill and, just like with Peter, offers Niki a chance to be cured. The catch? She has to leave her family in order to enter a treatment program.
Instead, Niki opts for the at-home medicine, but after two months of taking the pills, the side effects of depression are too much to bear. Ninki flushes the rest of the pills down the drain.
During these same two months, Peter is continually locked up. He says that's fine with him, as he assumes it's the only way to avoid endangering those around him. But a mysterious fellow prisoner is telling him otherwise (through the vent that connects the rooms). He says The Company is yet to perfect the cure and has anything but Peter's best interests in mind. This fellow inmate? Adam Monroe.
Back to the hospital: Mrs. Petrelli tells Nathan's wife that there's a history of mental illness in the family. She says her son is making up the fact that he can fly and Peter exploded. She tells Nathan's wife to keep this a secret.
Simultaneously, D.L. is learning about a secret: Niki has stopped taking her pills and another alternative personality has emerged. This one takes Niki away to L.A., where loyal D.L. tracks her down at a club. He finds her dancing with some loser and tells him to back off, that's his wife.
Upon seeing a photo of herself with Micah and D.L. Niki's memory comes back, and so does she. But just as D.L. is leading his troubled love out of the club, the guy she has been dancing with shooting him in the chest. This is how D.L. dies.
Let's go back to The Company's facility: Peter asks Bob for a chance to see his family. But Bob confirms what Adam has been telling our hero: this isn't gonna happen any time soon.
Newly inspired, Peter stops taking his medicine and eventually regains most of his powers. He uses them to break free from the cell and, along with Adam, heads over to see Nathan. Adam uses his blood to cure Nathan and then the coolest part of the episode takes place, the sequence that truly sheds light on Peter's situation so far in season two:
Elle and the Haitian catch up with Adam and Peter outside the hospital, immediately after Adam gives Peter a passport and a plane ticket to Montreal (and Peter snatches a picture of himself and Nathan from the latter's room). Adam yells to Peter that they should meet at a warehouse in Montreal... the Haitian takes off after Peter and eventually tracks him down inside a storage crate (all this sound familiar?).
Inside, the Haitian handcuffs Peter and erases his memory, saying it's an act of kindness and an opportunity for our hero to have a fresh start. He also places his necklace around Peter's neck. Pretty cool to see how this all came together.
Oh, and we also learn in this episode that Maya accidentally murdered Alejandro's entire wedding party when she first learned of her toxic tears. A few months later, she also kills a cop in the same fashion with Alejandro watching, leading the two of them to escape and begin the incredibly long, rather boring journey that they are still embarking on all the way through season two so far.