Mike tells them that Eddie was able to use telekinetic powers to mind control the bully Gene, Tim's brother, and have him take a nosedive off a cliff. At the Crow's Nest. So in turn, Mike says that he had to stop his out of control brother, who was under the influence of Candle Cove. Of course, no one buys it.
Jessica, Marla and Amy show up at the abandoned house where Gary has taken Mike. It's going to take a lot of couples therapy to heal this wound. Turns out, Jessica and Mike had been exchanging emails (that Gary found!) long before Mike showed up in town. So for Gary, maybe this interrogation is about something more than the murders?
At the hospital, Mike tells Amy that Eddie killed the four kids during the Iron Hill murders under the influence of Candle Cove…and then he disappeared. So this handles the whole "will the cops want to take Mike in for murdering his brother" problem.
Mrs. Booth has a bunch of young kids over at her house - the same ones Amy caught stabbing the mannequin - to watch Candle Cove and drink hot cocoa. Also, see how they're covered in blood? These same lil rascals murdered Tim as he walked home through the woods and Mrs. Booth helped them hide the body. Nothing weird/illegal/inappropriate about that at all.