The parents talk to Gregson in his office. Watson blathers at Holmes about the bully and how touching it all was. Then she comes to her senses and asks if any of it was true, and he did, in fact, go to boarding school. The lawyer suggests an immunity deal, where Adam will get off, then he'll tell them where the Balloon Man is. They'll hear by the morning, which will probably be too late for Mariana Castillo. Holmes leaves, because he wants to run with the fact that the man came home with doughnuts every morning. So he works nights. That's enough to identify someone, right?
Back at the Brownstone, Watson is willing to let Holmes work all night. He says he does not require a listener. He needs to read every word and study every image personally, so there is no real role for Watson tonight. So she can go get sleep. But first, she wants to teach him a trick she learned in medical school. It's calisthenics! Basically, do some squats and get your blood flowing. That'll give you the energy to keep going. I like that she's providing knowledge based on the hellish experience of becoming a doctor, rather than specific medical knowledge doctors have.
The next morning, Holmes reports that the FBI used to have a theory that Balloon Man was an exterminator because some neighbors had tented homes. The FBI investigated the company and gave up, but Holmes thinks the Balloon Man changed jobs between the third and fourth victims. The parents of some later victims had a subscription to "The Investor's Post". And the other ones had neighbors who subscribed! So Holmes is on the phone, pretending to be a subscriber who wants to send a tip. Watson tosses him a pen. That's helping, isn't it? Sometimes you really need someone to toss you a pen.
The man they are searching for is Samuel Abbott.
The apartment the police go to is empty. But there's a room with balloons in it. Balloons that say things like "Congrats!" and "You did it!" Also there's a thumbdrive with a video! A sweaty guy (who looks sort of like an unkempt, unshaven John Hodgman) says, "You have something that's mine. You have Adam." He calls Adam his son. And the police have until noon or his six victims will become seven. How does he know what day the police found the apartment?
The Castillos want to make the trade. But the police can't do that. The Castillos don't believe that Adam is just "a victim". They're jerks about this, in my opinion. Holmes points out that victims of horrific abuse are often protective of their abusers, but that doesn't mean they should be sent back there. Holmes wants to go back to the files. Gregson says no cop can talk to Adam. No... COP. Before acting on this semi-legal plan, Holmes takes a moment to tell Watson he might even listen to her again in the future. But "not your sobriety twaddle." She hasn't really done much sobriety twaddle.