Elena realizes those inhabitants "blessed with speed and strength" were werewolves. The Originals lived in peace with them for 20 years, during which time the parents had more children, including Beckster. Thanks to the magic of the L-edit, Rebekah's current day narration extends beyond the video of this scene. She tells Elena, "Once a month, our family retreated to the caves beneath our village. The wolves would howl through the night, and by morning, we'd return home."
Ye Olde Ancient Virginia, Early Morning After a Full Moon: Anyanka (look, I already can't remember that other name, so I'm just going with it) watches as Rebekah wanders through a home. Captivated by the charms dangling in front of the window, Becky reaches out to grab the one that will someday be Elena's necklace. When it burns her, Anyanka says, "That is not yours to touch."
Outside, Fey-British-'70s-Film-Jesus Klaus runs screaming back into the village. In his arms lies a lifeless looking Original baby brother, Heinrich. The boys had broken the rules and snuck out to watch their neighbors transform into wolves. Heinrich paid the ultimate price for these hijinks. Eloise Hawking begs Anyanka to find a way to save him. Anyanka says the spirits will not give them one. The boy is gone. And with a J-edit, we hear present day Rebekah, finish her explanation to Elena, before cutting away from the video showing Ye Olde Rebekah, Klaus, Eloise Hawking and Anyanka, mourning over Heinrich. Present-day Rebekah: "And that was the beginning of the end of peace with our neighbors." Whoooooosh.
Mossy Manse, Stefan's Room: Rebekah continues: "And one of the last moments my family had together, as humans." They're interrupted by Elena's phone. As Becky predicts, it's Damon, checking up on Elena. He's at some food-and-drink-serving-place that isn't the Mystic Grill! Elena overhears her other Salvatore boyfriend say he'll be at the bar. She asks Damon, "Is that Stefan?" Damon admits it is. "Yeah, I kind of went off book." Elena is peeved, but Damon tells her he's "got this" and hangs up.
Not-the-Grill: Damon orders himself a shot of the best whiskey in the house, and then compels blonde bartender Callie to let Stefan feed on her. Callie gasps when Stefan sinks his teeth into her wrist. Damon positions himself so that the other patrons can't see what's going on and eye-things at her. "Hi, Callie." Commercial.
Stefan is Quarters virtuoso. He credits fifty years of being on the boring bunny diet for his coin bouncing precision. Damon sends Callie off for another bottle of bourbon. Stefan's only drinking Callie. Alone, the boys have some bitchy bonding time.