 Cooper, Truman, Hawk, and Dr. Hayward venture into the woods and have tea with the Log Lady and discover a crime scene in the woods. Audrey Horne takes a job at her father s department store to look further into her own investigation where Laura also worked. Hank Jennings returns from prison to a job at the Double R Diner, while Norma is unaware about the two-faced Hank s intentions. James and Donna show Maddy Ferguson there findings and enlist her help in Laura s murder. Meanwhile, Jerry Horne invites some randy Icelandic businessmen to the Great Northern Hotel to get them to buy a piece of real estate called Ghostwood Estates. Hank secretly confronts and beats up Leo for taking over his drug dealing business and letting it get out of control. Leo again takes out his angry by hitting Shelley, who finally loses it and shoots him. A shocking turn is revealed where Catherine becomes suspicious about Benjamin s intentions as they plan to burn down the Packward Sawmill to collect the insurance money, while Josie secretly meets with Benjamin where it s revealed that she and Benjnamin have all this time been conspiring to also burn down the sawmill for the insurance money and kill Catherine.