Inside the cell, we see that Peter's fiddled with the wiring so he can hear what's being said outside somehow. Not only that, he's able to talk through the telephone speakers and tell the Fringe gang that the devices are memory disks. He's seen them before.
A very pissed-off Broyles busts into the room to ask what he knows about shapeshifters, and Peter says, smugly, "Quite a lot, actually." Like how if you shoot them in the head they bleed mercury, he says. "Those are the old ones. What about the new ones? The human shapeshifters?" asks an unimpressed Broyles.
Peter's has no idea what Broyles is talking about, so Lee moves on to the memory disks, and Peter explains that the disks are divided into three partitions: cognitive functions, biochemical functions, and mission objective, and he knows this because he's decrypted a couple himself. Lee asks if Peter could decrypt another one, earning the ire of Broyles: "I'll ask the questions, Agent Lee," he says, but Lee is undeterred: "We've been sitting on this tech for weeks. Our people aren't able to crack it. What's the harm in letting him try?" Broyles looks like he's about to eviscerate Lee. "You about done?" he says, icily.
And now Peter steps in to say that Lee has a point, like maybe the crazy Fringe prisoner is going to make Broyles come around.
Olivia wants to know what Peter gets out of this, because he's obviously not doing it out of the goodness of his heart. Peter says he just wants to talk to Walter again, and Olivia points out that he upset Walter the last time that happened. "I'm sorry about that. I was talking to him like he was the man that I knew, which clearly he is not. He's different. Just like you are," he says. If that's not enough, Peter points out that he needs Walter's help, and they need Peter's. Lee asks if anyone has a better idea, and Broyles' glowering silence is tacit approval, so Olivia says she'll see what she can do.
At that moment, Walter is opening a box of trinkets -- little reel-to-reel wheels, toys. He picks up a shell and holds it to his ear, listening for the sea. He rummages through the box -- Peter is scrawled in a kid's printing on the underside of the lid -- and pulls out a coin and tries to roll it across his knuckles like they used to, but his hand is trembling much too much to do it very well. His face is halfway between a smile and a sob.