-Victor Mendelsohn, a diamond cutter is found stabbed to death with his own electric saw.

-When Jane drinks tea from the victim's kitchen he suffers severe hallucinations and sees his deceased daughter.  She tells him his quest for Red John isn't helping her. She'd dead.

-Victor's diamonds are found in his assistant's bag but Jane believes he was set up.  He and Lisbon work through the clues of his hallucination.

-Jane realized that the neighbor, Betty lied.  She could see into Victor's kitchen. 

-Betty drugged Victor's tea and stole his diamonds, then made him saw into himself in his drugged state.

-When the hallucination of Charlotte disappears, we see Jane making himself more tea.