Sherlock lurks on the sidewalks of London and looks up the street. Inside a pub, he...finds Lestrade. That was easy! Lestrade calls him The Prodigal Detective. Unable to resist the urge to explain how great he is, Sherlock reminds him of the Adventure of the Norwood Builder (an actual Sherlock Holmes story, of course), in which he told Lestrade about his caches of money and passports around the city. He checked all the stashes, and the only untouched one was in a library across the street, and Lestrade must be waiting for the security guard to go off duty. Lestrade tries to talk about Lawrence Pendry, but Sherlock insists that he's here to drag him back to Scotland Yard. Or to call the detectives to come to the pub to get Lestrade.
They go out of the pub together, and Sherlock says Gregson isn't as sharp as Lestrade, "obviously." Lestrade hops a fence to go get the cash from Sherlock's secret money-hold. Sherlock seems surprised that Lestrade isn't just letting himself get dragged in, and Lestrade insists, "I'm gonna be there when Pendry is nicked." He reminds Sherlock of all the times Sherlock followed a million crazy theories until he found one that was right. And back then, Lestrade never even got to have an opinion! Lestrade says, "You can turn me in. You can do whatever you wanna do. Personally, what I would prefer, Sherlock, is if you and I could work together just one last time." Sherlock scowls.
Mycroft cuts vegetables and speaks French on the phone. Watson comes up the hallway, and there's a weird close-up of the knife in Mycroft's hand. That will be important later! They establish that Sherlock never came home last night. Mycroft says she must be learning from him, because that's the only way anyone can put up with him. She says she doesn't "put up" with him because they're friends, which prompts Mycroft to say the line that's practically this show's thesis: "Sherlock doesn't have friends." Watson doesn't blink: "Yesterday, I would have told you he doesn't have a brother. But he does." Mycroft says Sherlock is addicted to being himself. Watson gets a text (written in clear English, which is not the way Sherlock's been established to send text messages) summoning her to 360 Purcell Street. Watson leaves to get dressed, and Mycroft sighs.
The Purcell address turns out to be an abandoned theater, which is very picturesque. Sherlock explains that funding waxes and wanes, so there are always abandoned theaters available to use as hideouts. That sounds great. I would totally live in an abandoned theater. This one is currently the hideout of Gareth Lestrade. Watson calls it his "lair," and asks what's up. Holmes says: "Milk." See, because Lawrence Pendry was lactose-intolerant and his wife was vegan. But there's a picture of the crime scene showing that their fridge had a bottle of milk. Why? Watson guesses that it's for guests. Lestrade asks her to give him space, and she glares at him, because he doesn't understand that she's here as a full partner in deduction.