An FBI agent (Kyle MacLachlan) and a sheriff (Michael Ontkean) find weirdness in a Pacific Northwest town while investigating the murder of a local teen.

Agent Cooper and Sheriff Truman learn more about Laura's life; Catherine plots to take over the sawmill.

Agent Cooper shows the sheriff's department an uncommon deductive technique; Benjamin and Jerry Horne visit One-Eyed Jacks; Donna and James make a commitment; Leo holds Bobby at gunpoint.

The town gathers for Laura's funeral; Cooper ponders his dream; Truman tells him about the Bookhouse boys.

Cooper questions Dr. Jacoby, who suspects Leo Johnson is the killer. Cooper's supervisior, Gordon Cole, calls in with Albert's report. Josie Packard spies on Ben Horne and Catherine Martell. Hawk tracks down the One Armed Man. Mrs. Palmer shares her vision of the killer, the same man Cooper saw in his dream. Truman and Cooper find the bird who attacked Laura belonged to Leo's friend, Jacques Renault. Hank Jennings has his parole hearing and makes a threatening phone call to Josie.

Truman and Cooper discover a macabre scene in the woods; Hank Jennings gets out of prison; Audrey goes to work for her father.