Ryan believes he figured out what the deal is with Wilfred...the dog is merely conjured up by his own imagination because he is mentally ill.  Wilfred believes that instead he is actually an immortal magical being.

The two head to the house of his former owner to see if anyone knows anything, but they find that the owner is dead, and there is a Wilfred clone there that doesn't get along with the magical being.

In the end they figure out nothing, and agree to let the answers come in good time.