Written by Dave Flebotte
Directed by Jake Paltrow
A stressed and worn Eli meets with Agents Knox and Selby, who press him for information. Eli gives them the name of Johnny Torrio's second in command, Joseph Balanchuk. Selby and Knox, pleased with the intel, assure Eli he is doing the right thing. The next morning, Eli finds Agent Knox, posing as a life insurance agent, at his table with June and Willie. When he gets Eli alone, Knox tears into him about Balanchuk, who has been dead for two years. Knox threatens Eli that if he doesn't start cooperating, Willie will go to jail.
In Tampa, Sally Wheet spots Lucky Luciano, Vincenzo Petrucelli and Meyer Lansky stashing heroin in with Nucky's rum shipments heading north. She reports the bad news to Nucky, who warns her to keep the discovery to herself. At Mickey Doyle's warehouse, Nucky asks Eli to take Knox and a group of Agents out to the White Horse Pike and stop the convoy rumored to be carrying the heroin. When they stop the shipment (which is led by Meyer Lansky), Agent Knox goes overboard and shoots an uncooperative driver in the head. Shortly thereafter, they find the heroin stashed away in the cases of rum.
While at work in New York City, Margaret, anxious to escape her living situation with her family in Brooklyn, calls to inquire about an apartment in the Inwood section of Manhattan. Arnold Rothstein, arriving for a meeting with her boss, Robert Bennett III, notes that the rent of the prospective apartment is more than Margaret could possibly afford. He offers her a deal in one of his buildings in exchange for tips about Anaconda Realty. When Margaret worries about losing her job if she's discovered, Rothstein suggests she might "gain something better."
Back in Atlantic City, Chalky White, wanting revenge for Narcisse viciously beating Daughter, gathers his men together behind the Onyx Club. That night, he plans to attack Narcisse at the UNIA on the Northside. Just then, Richard Harrow steps outside. Harrow, who works as a dishwasher at the Onyx Club, prompts grumbles from Chalky's men about the "half-face white boy" taking their jobs. Chalky explains to them that Harrow is a friend and tells him, "You need something, you look me up."
In Cicero, after the death of Dean O'Banion, Nelson Van Alden is fully entrenched in the Capone organization. Johnny Torrio learns Al Capone has reorganized, bringing on Van Alden to take over collections for his brother Ralph, whom Al promoted. Torrio is angry with Al for getting ahead of himself, sharply telling his protégé he has no plans to retire.
On the Northside, Chalky and his men attack the UNIA, killing three of Narcisse's men. Narcisse survives the hit and shoots Chalky in the shoulder as he makes his getaway. Later, Narcisse confronts Nucky at the Onyx Club, demanding to know Chalky's whereabouts. Fed up with the doctor, Nucky asks him, "Who the fuck do you think you are?" Nucky tells Narcisse to take the fight up with Chalky - he doesn't know where he is.
Forced to kneel before an open grave, Lansky admits to Nucky he was acting on Masseria's orders. Furthermore, there's a fortune to be made in heroin; what would Nucky have done in the same position? Nucky orders Lansky to call Masseria down to Atlantic City, if he wants to see him or his heroin again.
Meanwhile, Harrow hides Chalky at the American Legion Hall, tending his wounds. After Daughter arrives for support, Nucky is called in. Nucky advises Chalky to lay low, as Narcisse wants him dead, and not to leave there until he calls. Nucky assures Chalky he will do everything in his power to help him, as Chalky helped him last year.
Outside of the burnt-out UNIA storefront, Mayor Bader, with Narcisse by his side, vows to find the people responsible and bring them to justice. Dodging reporters, he drives away with Willie and Narcisse.
Margaret takes trade confirmations from her boss and shares them with Arnold Rothstein, instructing him to wait until her boss sells. In return, she wants a "rent-free apartment, guaranteed for five years" in a safe neighborhood with bedrooms for her children. Rothstein agrees to the deal but questions why Margaret will take from him but not Nucky. "I earned this. And when it's over, I owe you nothing," she explains.
Joe Masseria meets Nucky at the Onyx, revealing his new partner in the heroin business: Dr. Narcisse. Narcisse wants Chalky dead and Nucky, playing along, says he wants his cut from the heroin if they are going to ship it on his trucks - and a deal is struck. Soon after, Nucky calls Mayor Bader to have Chalky escorted out of town. Unbeknownst to Nucky, Bader is in Narcisse's pocket and the two Deputies that pick up Chalky try to kill him and Daughter. Chalky fights back and ends up killing them both.
Back in Cicero, after Torrio leaves for the day, Capone receives a mysterious phone call in Torrio's office - the man on the other line is "just calling to say goodbye." Van Alden spots gun-toting men in the building across the street and orders Capone to hit the floor just as the office is riddled with machine-gun fire. Al becomes suspicious that Torrio left at a very convenient time.
Knox goes to Washington DC to update J. Edgar Hoover about the Thompson Organization. Hoover, who watches a film about the "negro agitator" Marcus Garvey, is more interested in Garvey than Knox's conspiracy theories.
With Chalky's reputation completely destroyed on the Northside, Lester and Maybelle visit the Onyx Club after-hours. When Maybelle goes to her father's office to lie down, Narcisse happens upon her. She introduces herself as Chalky's daughter and reveals that Samuel's father called off the wedding, with relish. Narcisse, who tells her he's Richard Pastor, comforts Maybelle: "Why must it be that our daughters suffer the most?"
Nucky eventually finds out that about Narcisse and Bader through Willie, who works at the Mayor's office. Knowing that things have just gone from bad to worse, Nucky adds more men to protect him at the Albatross. Eli shows up and sees that Willie is now involved in the family business. Eli questions if this is the life his son wants. An earnest Willie replies, "Pop, isn't it what we do?"