"But you've done a lot more than observe," says Peter, meaning September specifically and not the Observers in general. September says it was his attempt to rectify the mistake he made. Then Fringe becomes A Christmas Carol or It's a Wonderful Life as the expanding universe dissolves into Walter's lab, and we can tell it's ages ago because Walter has that hair pelt thing on his head. That's Peter's real father, says September, developing the cure that would have saved Peter's life. Except that Peter and the Observer watch as Walter notices September (the one in the lab at the time, not the one with Peter) watching him. "What are you doing here?" asks Walter, and the then-September apologizes for disturbing him, adding that he's an admirer. The now-September tells Peter that Walter found the cure -- we watch the stuff Walter was working on boil from red to blue -- but in September's desire to witness the moment, he distracted Walter from realizing it.
Of course, Peter already knows all this, so he asks September why he was there in the first place. "It was important. You are important," says September, which is why he couldn't let Peter drown at the bottom of Reiden Lake, why it was necessary to let the other Dr. Bishop cure him instead -- and we see wavering images of these events in the smoke and gas beyond the -- well, let's call it the observation deck. But despite September's efforts to make things right, the actions only culminated in further corruption of the timeline, and the war between universes drastically altered destinies and brought about a child that was not meant to be.
That gets Peter's attention. He asks, "What child?" and September says, "Your son, Henry." Holy shit, I forgot all about Henry! We see images of the adorable little baby as well as Fauxlivia as September explains to a gobsmacked Peter that Henry was born to the wrong Olivia Dunham due to a series of circumstances that never should have happened. "This event would have irrevocably altered everything was to come," he says. Peter walks toward the window and puts his hand up. "Henry. I have a son," he whispers. He smiles. September says, "Uh, everyone who has a son named Henry, step forward. Not so fast, Peter." He explains that when Peter made the sacrifice to step into the machine, he was not the only one who ceased to exist. Peter, who seems to have taken to the idea of fatherhood really quickly, looks gutted. September says he thought at the time that that would be the end of it. "I cannot explain, but it is clear that I was wrong," he says. Yeah, "cannot explain," no kidding. "Cannot explain" is pretty much the slogan for later seasons of any J.J. Abrams creation, isn't it? But since Peter has returned in physical form, this is an opportunity for him to put things right. And as visions of Olivia flash before Peter, September explains that the Olivia "is the one." She's the one from whom his shared future was meant to spring, he says. "This must be, and everything will be as it was intended. You must find a way." The cosmic Chris Harrison abruptly stops, glances to the side, and says, "They are coming." Peter asks who, but the Observer tells him there's no time and he needs to go. There's some sort of explosion outside, and the observation deck starts to disintegrate. It's like there's a wind blowing bits of it away, and Peter struggles against some sort of unseen force. September tells Peter he needs to do something for him, and Peter refuses until September tells him where Olivia is. "For that, you have only to go home," says September. Peter starts bitching about how he knows he has to go home, back to his timeline, but he's talking about Olivia in this timeline, and the Observer tells him to go home again, and then Peter wakes up.