Contains spoilers for this episode and earlier episodes.
Gordo brings the handgun in his backpack to school, prompting a search of Chazz's house. Police find the evidence Lester planted in the gun cabinet. Lester tells Bill that Chazz was having an affair with Pearl and killed her during an argument, then shot Vern when he arrived. He explains his injured hand by placing himself at the shooting and says fear kept him silent. Bill believes him. Chazz is jailed while Lester goes free. Lester then sleeps with Gina Hess after implying he can help with her insurance claim, concealing that Sam had stopped paying the premiums.
Molly survives Gus's accidental shot but loses her spleen. A return to the blizzard shows that she shot Wrench before Gus shot her. From hospital, she tries to question the wounded hitman and tells him Numbers is dead, but gets no useful answer. Malvo travels to the Fargo crime syndicate's offices and kills the men inside, including its boss. FBI agents Budge and Pepper sit outside arguing in their car and fail to notice him entering with a weapon. Once Molly is discharged, she returns to Bemidji and discovers that Bill considers Lester cleared. Her investigation has been overtaken by Lester's story about Chazz.