So the Watcher grabs Olivia and throws her in a wooden crate that he's nailing shut, despite her protestations. I take it she's never traveled "No-Frills Class" on Carnival cruise lines? Despite being tied up, she manages to get her phone out and dials Esther with her thumbs, but she can't get a signal. The same thing always happens to me when I'm trying to get someone to rescue me from a watery grave! The Watcher slides the crate into the water, and it starts filling up fast while Olivia screams.
And the next thing we know, Peter is ripping the boards off the top of the crate. "I heard you were looking for me," he says, and he helps pull Olivia out of the crate and into his raft. The other boat is nowhere to be seen. He wraps Olivia in a blanket, and she stares at him, shivering.
The next day, Olivia strolls out of a room in the Bishops' house wearing a white T-shirt and pajama pants. Is there any way Fringe division could make that standard-issue uniform? Because she looks good. She wanders into the living room, where she sees a map with several pins stuck in it, and then suddenly Peter is there watching her. He asks if she feels better. "Do you mean is a hot shower better than drowning in a pine coffin? Much. Thank you," she says, like don't drop the sarcasm even for the guy who SAVED YOUR LIFE or anything. Olivia figures Peter doesn't live here, and he says no one else does either, so it seemed like a good place to hide out. The map, however, he admits, is his. "What is it?" she asks. Instead of answering, he just makes her breakfast, while we listen to Miles Davis in the background. Nice breakfast-making music, although Sundays I tend to play nothing but Johnny Cash while making pancakes. Anyway, Olivia asks Peter how he knew she was drowning, and he says he'd heard a cop named Olivia Dunham was looking for him, so he was following her. "Well, someone's been giving you false information, because I'm not a cop. I'm a private detective," snaps Olivia. Anyway, Peter smoothly changes the subject and asks if she likes jazz: "You can tell a lot about a person from the music they listen to. And whether or not they dance." Olivia confesses to not like jazz, but she enjoys dancing. And then Peter says he's the opposite, because he hates to dance. But he'd take Olivia, which startles her, pleasantly. "Seems like it'd be fun. You look like a good dancer," he says. Yes, Peter. She is pretty.
She gets all aw-shucks for a minute, before getting down to cases: "I know who you are, and I know what you did. Wanna know why I was looking for you? Dr. Walter Bishop hired me. I know you took his glass heart." Amused, Peter takes a sip of coffee and asks, "Is that what he told you? That I stole his heart? What else did Walter Bishop tell you?" Olivia says Walter also said that without his heart he would die, and all the good he does for the world would die with him. "Well, I guess I'm not the only one who's been given false information," says Peter, who then whisks Olivia into the living room to show her the map with all the pins stuck in it. Multicoloured pins in the shape of what looks like an asterisk. Astrid? Peter tells Olivia that there are 147 pins there, each one representing a child injured by Walter. "Walter's invented a great many things. Wondrous things. That much is true. But what he didn't tell you is where his ideas come from. Elephants, rainbows, licorice sticks... they come from the dreams of children. He steals children's dreams and he replaces them with nightmares."
Olivia asks who else knows about this, and Peter says nobody: "I worked for him for years, and I didn't even know," adding that it's why he was willing to die so Walter could live. Peter unbuttons his shirt oh -- it's that kind of party, is it? -- and unlocks a heart-cabinet on his chest. Inside is the glass heart, beating merrily away. "It's your heart," says Olivia. Peter says he was born with it, and he was willing to give it to Walter because of all the good he's done, at least until he learned the truth: "Walter Bishop isn't responsible for all the goodness in the world. But he is responsible for so much evil."
Suddenly the house rattles and rumbles, and then busting through the wall is the little subterranean torpedo/vibrator we saw way back in "The Arrival." "Oh hell," says Peter. "They found us." And then the house is overrun by Observers, er, Watchers. It's a royal rumble of sharp-dressed baldies! After some hand-to-hand combat, which the Watchers look like they're losing, despite their superior numbers, one of them pulls one of those freaky guns and starts firing at Olivia, chasing her through the house, until at last she's able to grab one herself and start firing back.
And just like that, the Watchers are gone. Like not repelled, but suddenly not there anymore. She heads back to the living room, where she finds a tired-sounding Peter sitting on the floor. "I knew you were a good dancer. You really cut a rug out there," he says. "Well, you're not so bad yourself," she tells him. She opens the heart-cabinet on his chest. It's empty. "I need your help, Olivia. I'm dying."
After the commercial break, Olivia scrabbles through drawers to find some batteries, like you'd think she needs new batteries for her Wiimote or something, and asks Peter what she does now. "Well, you ever play that game Operation?" says Peter, struggling to breathe. He tells her it's just like that, only in reverse: "Whatever you do, don't touch the nerve endings."
She's extremely nervous, and Peter has to grab her hands to steady them and tell Olivia that she's going to be fine, and to take them one at a time. And while Olivia gingerly pulls out the battery connecters, Peter chats her up about why she became a detective ("To care for people." "Then who cares for you?") so I guess it's a good thing that the Watchers didn't steal his glass balls.
Olivia finishes putting a battery in, and there's a red glow now coming from Peter's heart-shaped box, and there's one more to go. Peter says it must be nice to know who she is, to know her place in the world, and Olivia says, "So what about you?" and Peter says, "Oh, I thought I did. I thought I knew who I was. But I was wrong," because, you know, this episode hasn't been blunt enough in hitting us over the head with everything that's been going on for the past several episodes.
Olivia gets the other battery in, but Peter is not responding anymore. This concerns Olivia so much that she starts singing, and ups the coolness ante by singing some Stevie Wonder -- "For Once In My Life," which was technically a cover, but I'd much rather call it a Stevie Wonder song than a Garth Brooks or Michael Bublé song. Sounds like that's actually Anna Torv singing -- she's no Susan Boyle, but she'll do.
Then, tragically, Peter wakes up. He's thrilled that Olivia fixed him, but still, the batteries won't last long, so they've got to get the heart back. "Those men who attacked us, they work for Nina Sharp," says Peter, but Olivia says it's not Nina Sharp who's got Peter's heart.
It's Walter, who's caressing the heart in his lab when Olivia and Peter show up. "How did you know it was me?" asks a surprised Walter, and Olivia reveals that she saw the torpedo/vibrator in Walter's notebook. FIGURES she'd remember that thing. Olivia strolls over with the box and Walter sadly puts the heart in it, and then Walter -- who's apparently in a motorized chair -- scoots over to plead with Peter that he never meant to hurt anyone, and he promises to change. He starts to sing "The Candy Man," and even in an annoying pseudo-musical story episode John Noble kills it, but Peter says it's too late: