We see a montage showing all of the dead Gerhardts, including Rye, Bear, Floyd, Simone, Otto, and Dodd.
Betsy awakens in bed next to sleeping Molly, watched over by Noreen. Noreen reports that the doctor said she had a bad reaction to the pills they gave her, which were supposed to kill the cancer but may kill her first. Betsy asks after her father and Lou. Noreen says there's been no word and tells Betsy to go back to sleep.
Betsy, by voiceover, recounts her dream of the future, seeing Molly grow up alongside Lou in a future filled with new technology and big-box warehouse stores. She sees older Lou of season one surrounded by older Molly, her husband Gus, and her children with Gus at her youngest's birthday party. She also sees the present day interspersed with the future, and worries that this imagined future might never come to pass.
In the present, Lou leaves an injured Hank at the hotel to follow Hanzee, who is pursuing the Blomquists. The Blomquists attempt to get a ride from an older man, but the man is shot dead by Hanzee before they can get in the car. Ed and Peggy continue to run from Hanzee, with Ed being shot in the shoulder.
Mike Milligan arrives at the Gerhardt house with Gale Kitchen. He finds it seemingly empty. They poke around the house and Milligan observes the old baby pictures of the family, turning one down.
Peggy and an injured Ed run to take cover in a supermarket, with Peggy kicking out the store clerk by telling him that there is a bad man coming. Lou shoots at Hanzee. Lou loses Hanzee, but finds Ben Schmidt who he admonishes, saying he was supposed to watch the Blomquists.
Ed and Peggy decide to lock themselves in a freezer from the inside, at Ed's suggestion, until they are rescued. Once they have locked themselves in, Peggy checks his wound. Ed comments that it is bad but Peggy reassures him that he'll be okay. Ed tells Peggy that even if they make it out alive, he doesn't think their marriage will make it because, despite his love for her, they are too different and she always tries to fix things that don't need fixing.
Hanzee, shotgun drawn, approaches the freezer.
Mike and Gale encounter an older Native American woman, Wilma, at the Gerhardt home cooking dinner in the kitchen. Mike stops Gale from shooting her. He tastes her food and then declares that there will be no more German food -- it is to be replaced with American food.
Ricky enters the house and comments to himself that everyone is dead. He then begins to loot the house, taking the silver before he is found by Mike and Gale, who hold a shotgun on him. Ricky tries to talk himself out of the situation, trying to convince Milligan to let him go. Milligan tells Ricky that he (Milligan) is a king, and that today is his coronation day.
As a king, he intends to start his day off with an act of cruelty and and an act of kindness. Ricky hopes for the first, but Milligan informs him that he already performed his act of kindness for Wilma -- giving her a car and the money in the cabinet. Ricky tries to pull a fast one by pulling gun on the two, but Gale shoots him. They leave him to die slowly and painfully, with Milligan commenting that he needs a nap before returning to Kansas City to bask in their "corporate praise."
Peggy tries to comfort Ed as he slowly becomes weaker. They hear someone try to open the door. Peggy notices smoke billowing though the vent and notes that Hanzee is attempting to smoke them out. She insists that someone will see the smoke and save them. She remarks about how this is just like the movie she was watching when Dodd escaped his binds. As she's speaking, Ed dies.
Peggy moves to open the door, brandishing a weapon, and finds Lou and Ben there. They explain to her that Hanzee was never there and there was never any smoke -- Hanzee escaped, and they followed Ed's blood trail to the supermarket. They check on Ed and he is dead. Peggy has a breakdown in Lou's arms, insisting that Hanzee was following them and she calls out to Ed.
Lou puts Peggy in his car and tells Ben that he is going to take her back to Minnesota. Ben tells Lou that Hank is in the ICU where his prognosis is "cautiously optimistic." Ben begins to cry, wondering how he will even write up the report for what's happened. Lou counsels him to start at the beginning.
Betsy awakens to find Noreen still sitting, reading, watching over here. Noreen asks what the cancer feels like. Betsy likens it to a half-rotten fruit. Noreen mentions Camus' idea that life is absurd because we're all going to die anyway. Betsy scoffs at that idea, rejecting it.
In the car on the way back to Luverne, Peggy asks Lou whether he thinks she can do her time in California and maybe see a pelican. Lou recounts a story about his time in the war, when a pilot needed to have all of his passengers jump out of the aircraft and somehow managed to get out himself against all odds. Peggy is confused at how this relates, and Lou explains that it is related to how Ed vowed to keep his family safe at all costs.
Peggy bemoans the fact that this all happened, and explains that she wanted to be someone of her own choosing. She rants about how she is a victim too, and that it's impossible for a woman to have it all, to be a career woman and have a family. Lou cuts her off by saying that people are dead.
As soon as Lou crosses the border into Minnesota, he pulls over and calls home on a payphone, telling Peggy to stay put in the car. Noreen answers and tells Lou about what happened with Betsy but that she is OK and that the doctor just said that she needs to come in next week for a check-up. Lou thanks Noreen and bows his head, visibly stressed.
Hanzee watches two boys throwing a baseball. A man sits next to him and hands him a wallet with a social security card for Moses Tripoli. The man explains the meaning of the name to him and asks if he'll go after Kansas City to apprehend them. Hanzee clarifies that he will kill them. As the two boys playing ball are harassed by bullies, Hanzee approaches them, reaching for his gun. The two bullied boys are a younger Mr. Wrench and Mr. Numbers, from Fargo Season 1.
At Kansas City headquarters, Milligan and Hamish have a conversation about Milligan's plans for his future and his goal for ascending in the organization. Hamish shows Milligan to his desk, offering him an office job in exchange for his hard work.
Milligan bristles, asking Hamish about the old days when a man conquered a place and was rewarded for it. Hamish explains that this is how business is done now and tells Milligan a few anecdotes about men moving up in their business by saving money in very stale, corporate ways. He explains the company's policies, like its 401K, and advises Milligan to take up golf and ditch the "western" look. Milligan is clearly disappointed but takes a seat at the desk before a typewriter.
Lou brings Hank home, where Molly and Betsy are thrilled to see him up and about (though he is still clearly recovering from his injuries). Noreen is still at the house, taking care of Molly and tending things around the house for Betsy. Betsy, Hank, and Lou discuss the case and Hank advises Lou to leave the spacecraft incident out of the official report. They discuss Hanzee's whereabouts; Lou is sure that he'll show up again.
The three of them laugh about their sorry physical states and Hank expresses gratitude that the three of them are sitting there together. Betsy gently brings up what the research and symbols that she found when she went to feed Hank's cats at his house. He explains that after her mother died, he felt lost. He comments that all conflict in the world (wars, in particular) can be boiled down to miscommunication. He says he wondered about what it would be like if there was one, universal language -- a language of pictures. Betsy is relieved to find out that he was making his own language, though Hank is a bit self-deprecating about the silliness of it. Betsy tells Hank that he is a good man.
Lou tucks Molly in and asks if she wants to go fishing the next day. She agrees. Lou and Betsy go to bed together, wishing one another a good night.