Ronald Reagan gives a speech while on his campaign tour, to the residents of Luverne, Minnesota.
Meanwhile, Joe Bulo and his men gather to hunt deer, including one man named Armbruster who arrives with a longbow. Bulo talks to Armbruster about the latter's ability to recruit politicians at the state and federal level to be under their thumb.
Hanzee presents Rye's belt buckle to Floyd, Bear, and Dodd and tells them that Rye is dead. As he's telling them who killed Rye, Dodd intercepts the story and spins it as if Kansas City arranged to have Rye killed by someone nicknamed "The Butcher of Luverne" (instead of an actual butcher named Ed).
As Armbruster prepares to shoot an arrow at a deer, he is suddenly shot through the head and killed. Bulo, the Kitchen brothers, and the rest of their crew are attacked by the maurading Gerhardts. Several of their men are killed by the Gerhardt associates. Hanzee sneaks up on and attacks the Kitchen brothers as they take out a few of the Gerhardt men. Bulo runs off and almost makes it back to his car before he comes face to face with Hanzee.
Reagan concludes his speech, bringing Karl Weathers to tears and the rest of the crowd to a standing ovation. Outside of the venue, Reagan shakes hands with Karl and Sonny, and is accompanied by Lou Solverson (acting as escort) to his next stop on the campaign tour.
Floyd sits holding and contemplating Rye's belt buckle with Charlie at the table. Dodd returns and tells Floyd that they took out the Kansas City men including Joe Bulo, but that Mike Milligan wasn't there. She remarks that she thought the Kansas City men would negotiate but Dodd counters that that's her feminine side talking. Floyd tells Dodd that she wants the butcher in Luverne dead, and Dodd tells her that he'll send Virgil (one of their fixers) to handle that.
Ed wakes up from a nightmare about Rye's death. He goes downstairs to find Peggy contemplating what they will take when they run off to California. Ed resists the idea of running, but Peggy insists, bringing up what Lou said about Rye's family. Peggy tells him that her boss Constance saw the car before they crashed it again, when evidence of Peggy hitting Rye was clear. Ed insists that they not run, saying that they'll stay and he'll buy the shop and they'll start a family. Peggy brings up the fact that it's too late to get the money back from the course, but Ed says that they'll figure it out and he walks off, leaving Peggy behind.
Charlie intercepts Dodd on his way out of the house and tries to convince his uncle that he can help in taking out the butcher. Dodd tries to ignore him, instead giving Virgil instructions. He insists that since Rye was a Gerhardt, a Gerhardt should be the one to kill Ed, Rye's murderer. Dodd finally gives in, telling Virgil to take Charlie and allow him to pull the trigger, but to clean up after Charlie if anything goes wrong.
Simone heads out of the house at the same time, brushing past Dodd and leaving against her father's orders to "do an errand." She ends up driving straight to the Pearl Hotel to meet up with Mike Milligan. She gets to his room, where the Kitchen brother who survived the massacre opens the door to her. She asks Milligan if he is alright. She asks him where the other Kitchen brother is and Milligan tells her that he's dead, killed by "her Indian," who killed a lot of their people.
Simone insists that she didn't know the attack was happening. Milligan asks her what she thinks their relationship is. He shows her Joe Bulo's head in a box, causing her to react in horror and disgust. She swears that she didn't know what was happening and is visibly afraid of what Milligan will do to her. He tells her that he wants to know what the Gerhardts are going to do from now on before they do it, or else she can die with the rest of them.
Lou and the Reagan bus are stopped off on the side of the road. Lou is contacted by radio by Ben Schmidt, who reports to Lou that there are 12 dead in the woods (half Gerhardts, half Kansas City). Lou reports back that he thinks that he has figured out what happened to Rye Gerhardt -- that Rye was killed by Peggy and that she and her husband probably panicked and covered it up, dumping the body somewhere. He offers to come up to Fargo the next day, once he is off Reagan duty.
Ed tries to call his aunt and uncle to get money from them to put towards the shop, but they turn him down. The butcher's daughter Noreen questions Ed about what the point of him buying the butcher shop is, quoting Camus' idea that life is a joke because you die in the end anyway, and insisting that no matter what you do, you will still be dead in the end. Ed is spooked and made visibly uncomfortable by her insistence on mortality and the futility of life and exits to the back of the shop.
In the car outside the shop, Charlie hesitates before getting out, asking Virgil how he should shoot Ed. Virgil tells him not to overthink it and to keep it simple. Charlie walks into the shop, encountering Noreen who greets him warmly. Charlie asks her for the butcher Ed Blomquist, and she clarifies that Ed is actually the assistant butcher though that may change when Ed buys the shop. Noreen buzzes Ed for Charlie. As he's waiting for Ed to come out, Charlie strikes up a conversation with Noreen about the book she's reading, commenting that it's depressing. She mentions that everyone thinks she's morose, and clearly enjoys Charlie's attention.
Ed finally emerges from the back, and Charlie imagines him looking terrifying, covered in animal blood. In reality, Ed emerges looking cheerful and asks Charlie how he can help him. Charlie exits, having purchased meat and not killed Ed. He rejoins Virgil in the car, avoiding the other man's eye.
Peggy hurriedly packs her belongings in her house and takes a bus to pick up her car from the shop, intent on leaving town. She encounters Sonny, who she pays for the car repairs with a check (requesting he not cash it until the end of the month). He asks if she's going somewhere and she cryptically remarks that it's "for the best." As she starts to pull away, she stops abruptly, seemingly having a moment of inner struggle. She reverses and runs back into the shop, asking Sonny if he'd like to buy her car, since she and Ed need the money for Ed to buy the shop. He offers $700 for the car, which she hurriedly agrees to even though Sonny points out that the car is worth at least double that. She retrieves her suitcases from the car and takes the bus back home.
Hanzee returns to the Gerhardt house where men are standing guard with guns at the ready. Bear asks him how it went with the confrontation with the Kansas City men. He thanks Hanzee for his service to the family, and remarks that ever since Otto took him when Hanzee was 8 or 9 Hanzee has been part of the family (though Dodd would never say that to him). Bear questions Hanzee about whether what he reported about Rye's fate was the truth, implying that he knows Dodd may have coaxed him to lie.
Dodd arrives, telling Bear to get away from "his man" Hanzee. He mocks Bear for enjoying taking orders from a woman (their mother) and makes fun of his sexual relations with his (apparently deceased) wife. Bear warns him that one day there will be a reckoning and everyone will get what they deserve.
Lou and Reagan discuss their various instances of military service while in the restroom at the same time, with Reagan actually just quoting the plot of one of his films to a taken aback Lou. Lou unloads to Reagan about Betsy's Lymphoma and relates it to the sickness in the modern day world. Lou asks whether America will get out of the mess they're in. Reagan offers up empty platitudes but when Lou pushes Reagan on the specifics of how American will overcome, Reagan simply claps him on the back and leaves the restroom without saying anything.
Betsy sits at the kitchen table and takes her trial drug, staring at and contemplating it before she does so. After she takes it, she looks down at Molly's drawing, becoming transfixed by what looks like a UFO/sun hybrid hovering over Molly's depiction of her family. Molly interrupts, breaking Betsy's reverie, announcing that Hank has arrived. Hank voices his concern about Betsy, offering to make her food and mentioning how he doesn't know how to handle the cancer stuff. Betsy asks him to watch Molly while Betsy goes to take a nap.
Charlie tries to call Bear on a payphone but is unable to reach him, leaving a message that he is ready to go back to school and wants to go back, like his father said, before he is interrupted and called out by Virgil. After leaving the message, Charlie reenters the butcher shop with noticeable trepidation, locking the door behind him and switching the sign to closed. He pulls his gun and sneaks into the back room.
Noreen spots Charlie pulling the gun and shouts to warn Ed. Charlie's gun jams and he panics, just as Virgil storms in to finish the job. Virgil's shot ricochets and hits Charlie. Charlie goes down. A fire starts to blare in the backroom, quickly growing larger. Virgil knocks Noreen down when she tries to intervene. Ed fights off Virgil, who manages to gain the upper hand, choking Ed.
At the last second, Ed manages to hit Virgil and finally kills him by taking a meat cleaver to Virgil's head. Noreen comes to and notices Charlie is still alive, begging Ed to take Charlie out of the blazing back room with them. Ed drags Charlie outside, where he and Noreen take in the sight of the burning butcher shop. Ed asks Noreen to tell the cops that Ed acted in self-defense, and that Charlie and Virgil attacked him first. Noreen agrees and Ed runs off, getting into his car, with a confused and disoriented Noreen shouting after him.
Back at the Gerhardt house, Dodd sits at the kitchen table and catches Simone as she returns home, asking her where she's been. She lies and says she met up with a friend. He mocks her for thinking that she's a grown-up and cautions her that grown-ups get "the fist or the knife" when they're bad. Floyd interrupts, telling Dodd to leave Simone alone and telling Simone to get upstairs.
Lou drives up to the scene of the butcher shop fire, taking in the sight. He sees Noreen giving a statement to Hank and Charlie being loaded into an ambulance.
Ed returns home and frantically tells Peggy that they need to pack. Peggy is in a great mood and tells Ed that he was right about the shop and the money, admitting that she was selfish. She shows him the check from selling the car, telling him that it's enough to buy the shop. Ed tells her that the shop burned down and that he killed one or two more guys, to Peggy's shock. He tells her that Lou was right, and that Rye's family came for him. He tells her that she needs to pack and they must leave. At that very moment, sirens begin to blare as the police pull up to the Blomquist house.