We start in New York's Fringe Division, with evil Col. Broyles looking at security footage to see where Fauxlivia and Lincoln Bee stashed Lincoln Lee last week... er, I mean, earlier today. He traces them -- watching video that includes audio of Lincoln Lee railing against the nefarious shenanigans of Walternate -- down to sub-basement Level 2, where his computer display shows him that the only rooms on that level without security cameras are a row of three maintenance closets. He gets a case out of a desk drawer that contains a syringe and three vials of yellow fluid. He fills the syringe half-full with some of the stuff and is on his way out of his office and presumably down to sub-basement Level 2 to deal a yellow-injection death of some sort to Lincoln Lee when Walternate shows up, Peter in tow, looking for Lincoln Lee. Col. Broyles manages not to blurt out, "I was just on my way to administer a syringe," but does want to know who Peter is. Walternate doesn't answer right away, but orders Lincoln Lee released immediately. He says he'll explain the rest in private.
That means back up to Broyles' office, where Walternate explains about the shapeshifters, Col. Broyles doing his best to seem incredulous. You know, given Walternate's speech to Peter last week about how Peter is the only one he can trust, I'm a little skeptical of Walternate laying everything out to Col. Broyles, especially when -- as Walternate points out right here -- that Fringe Division appears to have been infiltrated. Luckily for Col. Broyles, he gets to find out just what Walternate knows by asking questions like who the shapeshifters answer to. Walternate doesn't know yet, nor does he know what their agenda is. Col. Broyles helpfully says that Fauxlivia and Lincoln Bee are running down a trace on Murphy's last phone call, so they may know more soon.
Out at the Flatiron District, Lincoln Bee and Fauxlivia discuss the possibility that Lincoln Lee's story is true. Lincoln Bee's a little doubtful; he's known Murphy -- might want to start using the past tense when it comes to Murphy, Lincoln Bee -- since the Academy, and he's always been a "straight arrow." However, Fauxlivia's got a hunch he's telling the truth, and we all know that hunches trump everything. Lincoln Bee chalks it up to Lincoln Lee's supposedly trustworthy face, and then Fauxlivia says she actually thinks he's kinda funny-looking, and Lincoln Lee is of the opinion that Fauxlivia is actually the funny-looking one, and hopefully no one tries to kill them while they're busy flirting like this while they're approaching the warehouse.