WARNING: If you don't want to know what happened in this episode, don't read this photo recap!
This episode starts with a PSA about the food chain. You see, everything below human is meant to be eaten. And also, sometimes there's just too much of a certain type of animal. Also…meant to be eaten. This doesn't bode well, right?
Lest we forget, this is a place where often a stairway appears in the middle of nowhere, and a creepy tiny person in a terrifying mask appears to terrorize the population. Or murder them. It's been a rough go for the people who live in the town of Garrett. And even worse for the inhabitants of the neighborhood near the old meat packing plant called Butcher's Block.
And then, a flashback to a year ago, when Alice and Zoe lived with their mother. One day, they heard a noise and went to go and see her. We don't yet know what happened to mom, but it's not great because we saw her in an asylum last episode.
For now, though, Alice is more concerned about finding her sister. And Alice is pretty interested in Butcher's Block generally. She says she's writing a book about the neighborhood, but is there more to it than that? They head out to the park and Louise tells Alice a story...
Years ago, in 1952, Mr. Peach (who owned the meat-packing plant) had a house where this park now stands. And after his daughters were murdered, some workers came looking for Peach, found a mysteriously horrible thing in the basement and burned the house to the ground.
When Alice sees someone small in a red cloak, she thinks it's Izzy, the girl she was supposed to be helping out at her social work job. She follows them and sees that the person in the red cape is walking off with a creepy dude. They CLIMB THE STAIRS and as Alice goes to follow, she hears a noise, passes out, and the stairs disappear.
When she comes to, she's been approached by the creepy dude she saw in a photo. Is it… Mr. Peach? He'd be 131 years old, so…who is this? He asks about whether she believes in God, and then says that she doesn't have to worry about Zoe. When she turns around to question him, he's gone.
Meanwhile, Diane is out cutting the hair of some dolls in a trash pile, when the spooky man from the stairs (the one in the old-timey suit) comes to find her. He chases her for a while, until she bumps into a police car. He laughs at the cops and taunts them until they arrest him and take him to jail.
Meanwhile, Alice and Louise come home to find Zoe, who says she's "cured" of schizophrenia. She says a man talked to her until she was "fixed." Problem is, a short while later, she definitely hears a voice of "the Butcher" who tells her that he fixed her and the process will change her. It's pretty terrifying.
Meanwhile, there's this guy. Who was arrested, told the officer that his name is Peach, then murdered and ATE his cellmate's organs. Who is he? Besides the guy who keeps going through the woods and into the stairs in the woods?
Officer Luke, who was the arresting officer, tells his dad (the Chief of Police) that they should keep him in custody. His dad says they're sending him to some other group of people to kick it down the road, and that Officer Luke should take a few days off. Instead...
As Louise and Alice open a letter they find in their house, the spooky weird red caped man goes running by. It's an invitation for "dinner and spirits" in the playground at midnight. Alice decides she's going. And Louise is going with her.
When Alice demands to know what happened to Zoe, Joseph smiles at her and the two of them are transported to the room alone. He says he's going to show her what happened to Zoe. She's slightly paralyzed as he does some procedure we can't see, that involves drilling into her skull.
He touches a part of her brain and Alice remembers seeing her mother stab her her sister in the stomach, and then he tells her that she has schizophrenia in her brain. He says "come up and join the family. Bring your sister." Because, they remind him of his dead daugthers.