Sansa is still running through hallways, and she's stopped by the Hound. She says, "Stay away from me. I'll tell my father. I'll tell the queen." But as the Queen is the one who sent him, that's not much of a threat.
Arya gets to the stables, where Ned's men were killed earlier. They'd been loading the Stark luggage onto the Stark wagon. Arya rummages through her box to find Needle, which I think is an excellent idea. A stableboy comes by to harass her, and she stabs him in the stomach, killing him. She runs. Good job!
Ned is in a prison cell. He can't see very well, judging by the out-of-focus POV shot of an approaching lantern. It's Varys, who's brought him something to drink. He drinks some himself to prove it isn't poisoned, because even Ned has some survival instinct buried inside him somewhere. Varys recommends hiding some for later. Then he gives a status report: Arya has escaped the castle and can't be found, and Sansa is still engaged to Joffrey. The rest of Ned's household is dead, which I guess means Septa Mordane and some people I never noticed. Ned is a little bit sulky and accuses Varys of doing nothing while his men were slaughtered. Varys points out his lack of armor, weapons, and general heroism. I'm not sure Ned understands the idea of not trying to do something just because it has no chance of working. Speaking of which, Varys would like to know what on earth Ned was thinking when he decided to go around announcing Joffrey's true parentage. Ned has some convoluted explanation about how it was an act of mercy, but Varys has to walk him through how his blundering around resulted in his good friend Robert being killed. Also, he trusts that Ned knows he's basically dead already. Ned is confident that he won't get killed while Catelyn holds Cersei's brother, but not only is it not the brother Cersei likes, she doesn't even have him anymore. Ned shrugs and tells Varys to go ahead and slit his throat, but that's not how Varys does things. Ned asks who Varys serves, and he answers, "The realm, my lord. Someone must." I think it's interesting that Varys and the men of the Wall both claim to serve the realm. And the Night's Watch guys also take a vow of chastity. Maybe I'm onto something!