It’s the middle of the night. Lacey is safe and sound sleeping in her bed. She suddenly wakes and finds the ghost of Regina sitting in her room. She doesn’t believe what she’s seeing at first until Regina tells her that she’s gone to heaven. Lacey asks her about the necklace and she refuses to say anything except that Danny really killed her. Lacey suddenly jolts awake and we realize it was all a nightmare.
At the Masterson house, the entire family is sitting down to eat breakfast. Tess and Jo begin talking about the Fall Festival and all the memories they have from years past. The conversation turns to Danny and Jo ends up telling her mother about the necklace and tells her father that Danny didn’t take it because it makes him look guilty. He yells at her for believing Danny and Jo storms out. When Kyle asks Tess who she believes, she tells him that she’s not really sure who’s telling the truth.
Over at the Desai house, Danny is sitting in his father’s chair and is looking at the necklace. He hears his mother waking up and quickly hides it. He goes into the kitchen to get breakfast when his mother tells him that she is getting rid of the chair and donating it. Danny tells her that he doesn’t want to get rid of it yet because it reminds him of good times. Karen hints that she knows about the necklace but Danny doesn’t pick up on it and leaves for school.
At school, Rico is trying to get Jo to attend the Fall Festival with him to help the Mathletics team sell pies. She tells him that she’s not sure if she wants to go because she isn’t much of a “community events” type of person anymore before heading to class.
In class, Phoebe and Lacey talk about Regina and Lacey decides to tell Phoebe about her dream. Phoebe suggests asking Ms. Crane about where Regina got the necklace to try and get a lead.
At a town meeting about the Fall Festival, most citizens are concerned about Danny being allowed to attend the Festival. They are worried he’ll present a threat and that his presence will affect the atmosphere at the biggest social event in Green Grove. Chief Masterson and the Mayor assure the people that Danny will not cause problems and that safety is the number one priority at the Festival.
Later at the diner, Danny and Jo are talking about the Fall Festival and Jo invites Danny to go with her. He is hesitant at first but eventually agrees to go with her. Lacey arrives and she and Jo get into a heated argument about Regina and the necklace. Lacey then gets upset about Danny and Jo attending the Festival and claims that Danny is only going to try and make himself look better and he wants to make the whole thing about him. Before Jo or Danny can respond, she storms away.
At the Fall Festival the next day, everybody is glaring at Danny and giving him death stares. He walks over to Tess’ pottery booth and she convinces him to sign up for one of her classes. Jo arrives and insists that they attend the formal that night together. Danny hesitates at first, but then decides to go with her.
Across town, Lacey visits Ms. Crane with some pictures of herself and Regina as young kids. She decides to ask Ms. Crane about the necklace and she tells her that she’s not sure where Regina got the necklace. Lacey notices a box of condolence letters and offers to help sort them for Ms. Crane, who greatly accepts the offer.
At the police station, the Mayor visits Chief Masterson and confronts him about the murder case. He tells the Chief that if he was doing his job properly, the town wouldn’t have to deal with Danny. He mocks the idea of getting a search warrant for nothing but a necklace and tells him that the department is a mess and that he better get organized or else.
Back at the Mathletics Pie booth, Jo and Danny are helping Rico sell pies. Rico pulls Jo aside and they talk. Rico expresses his dislike for Danny helping sell the pies. A man approaches the booth and confronts Danny. He tells Danny that he has no right to be at the Festival and that he doesn’t even belong living in Green Grove. Jo tries to calm things down but the man shoves Danny into the booth and destroys almost all the pies. Chief Masterson arrives and breaks the two guys up and clears out the small crowd of people that had gathered.
Shortly after, Rico yells at Jo for bringing Danny along to help at the booth and gets even angrier when she tells him that she’s going to the formal with Danny. I’m sensing some jealousy there.
Outside of the diner, Danny is walking back to the Festival with new pies for Rico’s booth when he’s confronted by Chief Masterson. Danny thanks him for helping him before and tells him that he is taking Jo to the formal. The Chief tells him not to bother going to the formal because he’s not going with Jo.
Across town, Karen visits Danny’s psychologist for an update. She asks what the medical definition of a sociopath is and as the psychologist answers, she slowly realizes that Danny is possibly an actual sociopath.
At the festival, Danny and Jo discuss the formal and Danny tells Jo that he isn’t going. He tries to convince Jo that she shouldn’t go either, but she refuses and tells him that she’s going.
In her room, Lacey is going through the condolence letters when she finds one that isn’t a condolence letter. It’s a note that reads “This is your final payment. Deal holds, keep your mouth shut. If you tell anyone… you know what’ll happen.” Wrapped inside the letter is a stack of $100 bills that total near $1000 total. Whatever is going on between her and this mystery person is some serious shit.
Later that night, Jo arrives at Danny’s house in a blue dress her mother found for her and tells him that he needs to forget about what people are saying about him and enjoy the formal with her. He tries to argue but Jo wins and he goes upstairs to get dressed. While finishing up, Karen walks in and tells him that he looks exactly like his father which makes Danny feel more comfortable. He says goodbye to his mother and leaves with Jo.
At the Festival, Lacey wants to turn the cash and the letter in to the police but decides against it. Instead, she walks over to a memorial that the townspeople have put up for Regina. She meets Ms. Crane there, who thanks her for everything she’s done before leaving.
Danny and Jo arrive at the formal together and everybody stares at them. News crews who had been speaking to the Mayor about the turnout for the Festival turn their cameras on Danny and Jo as they confront both the Mayor and Chief Masterson. The adults try to discourage them from remaining at the Festival together and the Mayor tries to force Danny to go home. Danny and Jo blackmail both of them by saying that if Danny goes home the news headline in the morning will be about the Mayor denying a citizen the right to attend the Festival.
Not long after, Danny is chosen at random for an apple toss competition and loses on purpose. He loses because one of his competitors is the same man who attacked him earlier. During the competition, Jo spots Rico in a suit and tells him that he cleans up nicely. Rico tells her that he wears the suit to the Festival every year. Jo nods before walking away and back to Danny, leaving Rico standing alone, jealous and also slightly hurt.
Danny and Jo run into her parents and the Chief tells Danny that he does not approve of him being with Jo at the Festival. Danny tells him that he had told Jo he wasn’t going to come but Jo showed up at his door and insisted that he attend.
After walking away from Jo’s parents, the two teens run into Lacey. They invite her to hang out with them but she declines, claiming that she has to be somewhere. She leaves abruptly and vanishes in the crowd. Jo and Danny decide to dance instead and they dance like total dorks. They end up embarrassing themselves in front of everybody before slow dancing together. Across the dance floor, Jo’s parents and Rico watch them together before leaving.
As they end their dance, Jo and Danny almost kiss but a text message interrupts them. Danny claims he has to run home quickly and leaves Jo only to go and meet Lacey. She tells him about the note and the cash. He tries to convince her to take it to the police but she refuses, saying that the two of them have to work on it together. Danny tells her that Jo needs to help them and then asks why they couldn’t talk back at the Festival. He suggests that the only reason she asked him to talk a few blocks away is because she wants to get him alone. Lacey tries to leave but Danny stops her and tries to apologize. However, when he opens his mouth, Lacey kisses him. He pulls away and she moves to leave once more, only this time Danny stops her with another kiss. Holy fan girl! The sexual tension between them has been crazy. I’m so glad they finally kissed because it was getting dangerously tense.
While Danny is away from the Festival, Jo finds Rico sitting at a table. She invites him to go the diner with her and Danny. Rico declines and asks why she trusts Danny so much. Jo says it’s because they’ve been best friends since they were infants. Rico gets upset and leaves, not even saying goodbye.
Back at the Masterson house, Kyle is upset that Tess is allowing him to take one of her classes. He argues with her about letting Jo hang out with Danny and tells her that she doesn’t care about Jo’s safety. Tess gets fed up with Kyle and calls him out for putting all the blame on Danny when he can’t prove that Danny has done anything wrong. She storms away, leaving Kyle sitting alone in the living room.
Across town, Rico is walking home alone when he sees Karen on a dock. He watches as she takes the red necklace and throws it out into the lake. Meanwhile, Danny meets Jo at the diner. He brings Lacey with him. As the camera pans out, they show her the letter and the cash.
I think Victor is still alive. I think that he gave Regina the necklace and was paying her for her silence about where she got it. I think that once Danny got out of juvy, Victor had someone kill her and remove the necklace before returning it to Danny.
Based on this episode, Lacey and Danny definitely have feelings for each other, even though Lacey is dating Archie. Archie hates Danny and tries to keep Lacey away from him. Jo has feelings for Danny and Rico has feelings for Jo but Danny keeps getting in the way.